State Bank of India (SBI.BO): All Eyes on SBI‘s NIM Trajectory; Can It Surprise Positively?

Research evidence excerpt

State Bank of India (SBI.BO): All Eyes on SBI‘s NIM Trajectory; Can It Surprise Positively?

Flash |

21 Jul 2026 16:53:53 ET │ 13 pages

State Bank of India (SBI.BO)

All Eyes Set on SBI's NIM Trajectory; Can It Surprise Positively?

CITI'S TAKE

Buy With private banks HDFCB/KMB/AXSB reporting sequential NIM

compression of 13–16bps in 1QFY27 while PSU banks PNB/UNBK/INBK Price (21 Jul 26 15:30) Rs1,044.50

registering 3–16bps NIM expansion, investors’ eyes are firmly set on SBI's Target price Rs1,230.00

NIM trajectory. We approach SBI earnings with a positive NIM bias given Expected share price 17.8% a confluence of factors: (1) Non-reporting banks (particularly SBI) implied return

credit growth at >2% QoQ, deposits <1% QoQ with likely LDR expansion Expected dividend yield 1.5%

(Fig.1). (2) RBI data: O/S TD rates down 8bps vs lending rates –4bps for Expected total return 19.3%

PSU cohort (Fig.2). (3) 30bps+ yield correction absorbed in 4QFY26, with

Market Cap Rs9,641,380M limited CoD benefit setting the base lower (Fig.3). (4) More balanced loan

US$102,214M growth: Narrower corporate-retail growth gap; SME sustaining >21% YoY

(Fig.4). (5) Modest deposit growth and CASA resilience: Limited CoD

pressure (Fig.5). That said, our positive bias carries risks—MCLR repricing,

wholesale-funded corporate growth, absence of IT refund (Rs10bn in 4Q), Kunal ShahAC

and seasonal 1Q slippages could apply incremental NIM pressure. +912261759856

kunal3.shah@citi.com

(1) System Dynamics: Non-reporting banks (SBI) credit growth implied >2% QoQ, Dipanjan Ghosh

deposits <1% QoQ; LDR rise likely +91-22 -6175-9872

dipanjan.ghosh@citi.com

System credit growth clocked a robust 15.9% YoY / 5.1% QoQ, while deposit

accretion ran at a softer 13.5% YoY / 5.5% QoQ. The reporting banks cohort