SBI Shares Soar 25% In 2025: Can India’s Largest Bank Sustain The Rally In 2026?

SBI Share Price: State Bank of India (SBI), the country’s largest lender, is shaping up for one of its strongest years in recent memory. The stock has surged 25% so far in 2025, comfortably outperforming

all private-sector peers in the Nifty 50. This marks a sharp turnaround in momentum for the bank after a muted 5% rise in 2023 and a stronger 23% gain in 2024. The current rally puts SBI on track for its fifth consecutive year of positive returns and its best performance in the last two years.

SBI’s appeal goes far beyond its sheer size. As the backbone of India’s banking system and a long-standing favourite among institutional and long-term investors, the lender is entering a phase where stabilising credit growth, shifting rate expectations and sustained improvement in asset quality are laying the foundation for more durable earnings. Against this backdrop, analysts believe price targets of ₹1,100 and above are increasingly achievable, highlighting the bank’s strengthening position within India’s financial landscape.

What’s Fueling SBI’s Growth?

Demand conditions remain healthy, and the recent GST cut is expected to further revive consumption. The Reserve Bank of India (RBI) projects GDP growth of 6.8% for FY26 and 6.6% for FY27, providing a supportive macroeconomic backdrop. Credit demand is expected to stay robust in the second half of FY26, with systemic loan growth projected at 11–12%.

SBI continues to demonstrate a strong structural advantage, combining quality growth with resilient returns. Net interest margins (NIMs) expanded by 7 basis points sequentially in Q2, supported by timely repricing of deposits and improved liability management. The bank’s CASA ratio stands at 36.9%, with a CASA market share of 23% and an overall deposit market share of over 22%. With the strength of its balance sheet and deposit franchise, SBI is well placed to outgrow the industry while maintaining its strong CASA base.

Analyst View on Valuation and Upside

Parag Thakkar of Fort Capital highlighted SBI’s massive scale, noting that its ₹43 lakh crore loan book accounts for nearly 23–24% of India’s total loan book, while the bank continues to grow at 12–14% with a credit cost of just 50 basis points. On valuation, he estimates FY27 EPS at ₹85, book value at ₹585, and subsidiary value at ₹280, suggesting the stock is trading at just about 1.1x book for a Return on Assets (RoA) of 1.2%, trending toward 1.3%. Thakkar added that SBI hitting ₹1,150 within a year cannot be ruled out, and despite the sharp rally, he believes any consolidation should be viewed as a buying opportunity.

Fee Income and Operating Performance

SBI has delivered strong 25% year-on-year growth in core fee income, largely driven by granular, volume-led growth rather than one-off gains. There has been no meaningful change in the take rate, with growth coming primarily from rising business volumes. According to ICICI Securities, the bank remains confident of sustaining healthy fee income growth going forward.

What Should Investors Do Next?

SBI’s combination of healthy loan growth, a strengthening revenue trajectory and stable asset quality continues to underpin its investment case. Following the second-quarter earnings, CLSA reiterated its ‘Accumulate’ rating and raised its target price to ₹1,170 per share, implying an upside potential of about 20% from current levels.

Axis Securities also maintains a ‘Buy’ rating, stating that SBI remains well positioned to sustain its growth momentum with no visible concerns on either growth or asset quality. With the NIM uptrend turning earlier than expected, the brokerage raised its FY26 NII estimates by around 3%, while largely maintaining its FY27–FY28 projections. Strong fee-income traction, controlled operating expenses that are keeping cost ratios in check, and healthy asset quality leading to benign credit costs have prompted an upward revision of FY27–FY28 earnings estimates by 3–5%.

HSBC remains constructive on the stock as well, reiterating its Buy call while revising the target price upward to ₹1,110 from ₹960. A stronger core pre-provisioning operating profit (PPOP) trajectory, the brokerage said, warrants higher valuation multiples.

Nomura expects SBI to deliver RoA of 1.1% and RoE of 16% in FY27–FY28. The improved RoE outlook has led to an increase in the lender’s target multiple, with analysts clustering around a price target of ₹1,100.

Outlook

SBI now enters the next phase of the cycle with a powerful mix of balance-sheet strength, earnings visibility and valuation re-rating triggers. Its improving NIM trajectory and strong loan growth continue to reinforce bullish sentiment. Even after a sharp rally, analysts see meaningful upside ahead, driven by the bank’s resilience, operating momentum and long-term investment appeal.

Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.