SBI shares in focus: Jefferies sees ₹1,300 target

SBI back in the spotlight after fresh broker targets

Shares of State Bank of India (SBI) are set to remain in focus after Jefferies maintained its “Buy” rating and set a target price of ₹1,300 per share. The target implies nearly 30 percent upside from prevailing levels cited in the brokerage note. The call comes alongside a broader set of upgrades and target hikes from global and domestic brokerages following SBI’s latest results and management commentary. SBI, India’s largest lender by assets, has also featured as a preferred pick among several houses tracking public sector banks.

Jefferies: loan repricing and deposits key for NIM stability

Jefferies said corporate loan repricing will be critical to maintaining net interest margin (NIM) stability. The brokerage also noted that SBI’s deposit franchise continues to improve, an important support as system competition for deposits remains elevated. Jefferies highlighted that SBI has a sizeable portion of higher-cost deposits raised before March that are yet to be repriced, which could support margins as repricing plays out. Separately, the brokerage flagged that the transition to the expected credit loss (ECL) framework remains a minor risk for the bank.

Growth and profitability expectations outlined by the brokerage

Jefferies expects SBI to deliver a loan growth CAGR of 13 percent and return on equity (RoE) of 14 percent over the coming years. On valuation, the brokerage said SBI trades at around 1.4 times its FY27 adjusted price-to-book value, which it considers attractive. In another update after the results, Jefferies raised its price target to ₹1,300 (from ₹1,190) and said it was valuing the bank at 1.5 times March 2028E adjusted price-to-book. It also said it raised earnings estimates by 2-4 percent for FY2027-28 and projected 12 percent compound annual growth in core profit over FY2026-28.

Stock reaction and the earnings trigger

SBI shares jumped 7 percent to the day’s high of ₹1,136.85 on the BSE in a session cited in the report, after brokerages raised price targets as high as ₹1,300. The move followed a reported 25 percent profit growth that beat Street expectations. SBI reported a third-quarter net profit of ₹21,030 crore, described as an 18 percent beat versus estimates, aided by higher fee income and lower-than-expected provisions. The combination of earnings outperformance and improving margin narrative helped drive the rerating discussion around the stock.

Capital position and optionality from subsidiaries

Jefferies pointed to SBI’s 11 percent CET-1 capital adequacy ratio as a supportive factor for growth. It also flagged scope to monetize stakes in businesses to support growth, adding an element of optionality to valuation discussions. In a separate management interaction cited in the material, Jefferies said SBI is not planning to raise capital or monetise or list stakes in subsidiaries. The set of reports also referenced subsidiary-related dynamics, including that SBI Cards and Payment Services Ltd. has seen higher credit costs and may look to review business platforms to build more resilience.

Other broker views: JP Morgan and HSBC on margins and growth

The coverage included references to other brokerages. JP Morgan, with an “overweight” view and a target price of 965 rupees, said the company beat its second-quarter profit view and that net interest margins improved by 7 bps quarter-on-quarter; it also noted that an upgraded loan growth outlook could support the stock. HSBC maintained a “buy” view and raised its target to 1,110 rupees from 960 rupees, citing improving earnings and upgrading EPS by 6-9 percent for FY2026-28 on a strong loan growth outlook. Jefferies also featured in this set with an earlier target revision to 1,140 rupees from 970 rupees, describing NIM improvement as a key positive.

Guidance points and balance-sheet levers highlighted in notes

Jefferies said SBI’s management has retained near-term guidance of 14-16 percent credit growth and 10-11 percent deposit growth. The brokerage also highlighted scope for improvement in the loan-to-deposit ratio (LDR) as deposit mobilisation gains momentum. One note cited SBI’s domestic LDR at 68 percent as offering headroom to optimise asset mix. Asset quality was described as holding up, including in the unsecured portfolio, and recoveries were also cited as a factor that could support earnings in the second half of FY24.

Macro and market backdrop: rates, risk sentiment and crude

A separate market commentary in the provided material noted elevated investor caution, with investors using VIX contracts as protection and near-term VIX contracts rising above those further out. The same commentary pointed to pessimism in CNN’s Fear & Greed Index and elevated implied correlation among S&P 500 stocks, interpreted as indiscriminate selling pressure during stressed periods. It also cited crude oil at “second-most overbought levels ever” on an RSI-based measure, with a reference point that the only more extended period was during the Gulf War in 1990.

On the India-specific macro angle, another analyst view cited RBI’s likely rate cuts in mid-2026 as a potential tailwind that could improve credit growth and reduce funding costs for large lenders like SBI. The same view also referenced the government’s capex push, revival of rural demand, and return of FII inflows in the banking space as supportive factors. These are directional macro considerations, while the brokerage notes on SBI remained focused on margins, deposit pricing, and loan growth.

Key figures and broker targets at a glance

Why the Jefferies thesis matters for SBI investors

The Jefferies argument centres on the mechanics of NIM protection in a shifting rate environment, particularly how corporate loan repricing and deposit repricing shape spreads. Its comment on higher-cost deposits raised before March and yet to be repriced is a specific factor that could influence near-term margin trajectory. The valuation framing, including FY27 adjusted price-to-book and the longer-dated Mar-28E multiple, signals that the brokerage sees room for rerating if profitability metrics hold. The ECL transition being described as a minor risk also indicates that near-term accounting or provisioning changes are being monitored, but are not the central driver of the call.

Conclusion

SBI remains on broker radars after Jefferies reiterated its Buy rating and anchored its case around loan repricing, improving deposits, and valuation comfort at stated price-to-book levels. The stock reaction cited alongside SBI’s profit beat underscores how quickly consensus targets can shift after results. Going forward, investors are likely to track NIM stability, deposit repricing, and any updates on ECL readiness and growth guidance, alongside the broader interest-rate outlook.