Why SBI share price falling despite strong Q1 results? Brokerages remain bullish

State Bank of India (SBI) share price gave up opening bell gains and declined as much as 1.49% on the NSE in Monday's trading session despite the company reporting June quarter results FY27 exceeding market estimates.

SBI shares opened at ₹1,108 apiece on NSE today, as compared to the previous close of ₹1,097.20 on Friday last week. The stock touched an intraday low of ₹1,078 on 10 August.

The stock witnessed a sharp decline amid profit booking. According to NSE data, approximately 94.90 lakh shares were traded on Monday.

SBI Q1 results 2026

SBI, on Friday, August 7, posted a 10.23% year-on-year (YoY) increase in standalone net profit to ₹21,121.22 crore for the June quarter (Q1FY27), compared with ₹19,160.44 crore reported in the corresponding quarter a year earlier.

The lender’s interest income rose 14.88% YoY to ₹46,992 crore during the quarter, from ₹40,907 crore in the year-ago period.

SBI also recorded an improvement in asset quality on a sequential basis, with its gross non-performing asset (GNPA) ratio declining to 1.47% in Q1FY27 from 1.49% in the previous quarter. The net NPA ratio edged down to 0.38% from 0.39% in the March quarter.

Provisions, however, increased to ₹5,047 crore in the June quarter, compared with ₹2,872 crore in the previous quarter and ₹4,759 crore in Q1FY26. Despite the rise in provisions, the bank’s credit cost remained unchanged sequentially at 0.27%, while improving significantly from 0.47% recorded a year earlier.

SBI’s domestic net interest margin (NIM) was at 3%, while its whole-bank NIM increased by 5 basis points quarter-on-quarter to 2.86%.

On the business front, gross advances rose 18.6% year-on-year and 2.3% from the previous quarter. However, fresh slippages increased to ₹7,359 crore, compared with ₹5,548 crore in the preceding quarter, taking the slippage ratio to 0.57% from 0.47% sequentially.

The bank reported a return on assets (ROA) of 1.11% and a return on equity (ROE) of 17.87% for the quarter.

SBI also recorded an improvement in its capital position, with its capital-to-risk weighted assets ratio (CRAR) rising to 15.67% from 14.63% a year earlier. The Common Equity Tier-1 (CET-1) ratio increased to 12.89% from 11.10%, while the Tier-1 capital ratio climbed to 13.90% from 12.45%.

SBI share price - Should you buy or sell?

Brokerage firm JM Financial has maintained its ‘buy’ rating on the SBI shares, however, has raised the target price to ₹1,275 from ₹1,200, seeing an upside potential up to 16.2%.

“With stable-to-improving margins supported by FCNR(B) flow, muted credit cost and healthy growth are expected to drive profitability in FY27. We are increasing EPS estimates by 3–5%, expecting the bank to deliver average RoA/RoE of ~1%/14.6% over FY27–28E. We maintain BUY with a revised TP to INR 1,275 (from INR 1,200), valuing the standalone bank at 1.4x FY28E BVPS (1.3x earlier),” the brokerage firm said.

Meanwhile, brokerage firm Emkay Global has also retained its ‘buy’ rating on the SBI stock, revising the target price to ₹1350.

“We tweak estimates and continue to expect healthy broad-based growth, supporting a normalized ROA/ROE of ~1.0%/~15% (ex one-off gains from subsidiaries or investments). We retain BUY and raise TP by ~10% to Rs1,350 (roll forward to Jun-28E ABV), valuing SBI at 1.4x Jun-28E ABV and its subsidiaries/investments at Rs352/share. Risks: Macroeconomic slowdown hurting growth/asset quality and higher treasury losses,” it said.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.