SBI shares rise over 1% as CLSA maintains outperform call; sees 32% upside

State Bank of India shares have been largely flat, up 4 percent in the last three months and 0.2 percent since the beginning of the year.

Shares of State Bank of India gained over a percent to Rs 809 in morning trade on June 27 after CLSA maintained an outperform rating on the lender, citing the bank's strong positioning in the coming quarters.

With a target price of Rs 1,050 per share, the brokerage implies an upside potential of 32 percent from the last close of Rs 797 per share on the NSE. SBI has continued to gain market share for the fourth consecutive year, not only from PSU peers but also from some private sector banks. While deposit growth was modest, its CASA performance outpaced that of peers, CLSA said.

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Further, India's largest state lenders' asset quality remains strong, with an improvement in gross slippage ratio in FY25—something only a few banks have achieved.

However, NIM performance was weak, and CLSA expects FY26 to be challenging due to margin compression. Still, the brokerage believes SBI will largely retain its loan market share over the next two years and deliver a 1 percent RoA and 14–15 percent RoE in FY27.

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Additional upside to profit could come from better-than-expected treasury gains, while valuation could get a further lift from potential divestments in Yes Bank and NSE.

In other news, SBI's qualified institutional placement (QIP), which is likely to be rolled out in the coming months, saw massive participation, particularly from foreign players, Moneycontrol earlier reported.

Sized at Rs 25,000 crore, the upcoming issue is set to be SBI's largest fund raise plan to date, larger than June 2017's QIP, which helped the bank raise Rs 15,000 crore of Tier-1 equity capital but witnessed a demand of about Rs 27,000 crore.

At about 9:35 am, shares of the company were trading at Rs 807, higher by 1.2 percent from the last close on the NSE. State Bank of India shares have been largely flat, up 4 percent in the last three months and 0.2 percent since the beginning of the year.

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