State Bank of India

Cheapest large bank; funding moat

Last close: ₹964.70; 29 Sept 2026 · reference
1D · 1M: +0.3% · −7.9%; price-only
Weight: 4.0%; 31 Jul 2026 · Aug rank 3
Thesis review: 8 Sep 2026; Why We Own, p29

Coverage owner: Research (per book); latest results Q Jun-26Screener ↗Tijori ↗NSE ↗

Broker research · 1 report

Sell-side views, extracted from the PDFs on file

Antique Stock Broking LimitedBUYdailymulti-company

Antique's Morning Presentation - From The Research Desk (Indian Banking Sector; NBFC 1QFY27 Review; Cement; FMCG)

19 Aug 2026 · Manjith Nair, Pashmi Chheda, Raju Barnawal · 86 pp · open PDF ↗

Target: ₹1,315
At report: ₹1,053
Vs our close: +36.3%

SBI delivered a Q1FY27 core performance beat led by better margins and lower provisions; Antique's preferred PSU pick, rated BUY.

Key points

Q1FY27: Advances Rs 4,99,20,037 mn (+19.0% YoY/2.3% QoQ); Deposits Rs 6,00,58,052 mn (+9.7% YoY); PAT Rs 2,11,212 mn (+10.2% YoY/7.3% QoQ)
Calculated NIM improved +6bps QoQ (vs 1-2bps expected), led by T-bill-to-MCLR migration; FY27 domestic NIM guided at ~3% (FY26: 3.03%)
Loan growth 19% YoY in line with FY27 guidance of 14-15% YoY, led by SME (+22% YoY) and agri (+25% YoY); gold loans surged 98% YoY
Other income benefited from Rs 43bn treasury gains (vs Rs 14bn loss in 4QFY26); credit cost low at 27bps; GNPA 1.5%, PCR 74.2%
Deposit growth (flat QoQ/10% YoY) was a relative weak point vs peers; bank expects $10bn FCNR(B) mobilisation in 2Q ($6bn QTD)
Note: Antique's sector-overview 'Banking coverage - rating and target price' table showed SBI at CMP 1,083/TP 1,255, while the Valuation Guide appendix showed CMP 1,053/TP 1,315 - both as printed; discrepancy noted in extractionNotes

Extraction note: This is a very long (86-page) multi-sector daily; only sections/data relevant to tracked portfolio companies were extracted in depth. The daily's Banking sector report (pages 3-60) also covers non-portfolio banks in similar depth: Kotak Mahindra Bank, IndusInd Bank, Federal Bank,…

Figures are transcribed from each broker's PDF as printed (units as the broker states them) and are the broker's estimates, not Buoyant's. "Vs our close" recomputes the target against the latest reference close (29 Sept 2026).

SWOT

Strengths · Weaknesses · Opportunities · Threats

Draft

Strengths

Cheapest large bank in India: 1.25x core (ex-subsidiaries) book for a 15–16% ROE, against our 1.5x fair P/B; base-case target ₹1,292 (+28%), probability-weighted ₹1,262 (+25%), BUY.
Funding is the moat: 39% CASA, the lowest cost of deposits among large banks, ₹3 lakh crore of excess SLR and a domestic loan-to-deposit ratio of 74% — SBI can grow loans 15% for three years without chasing deposits, which no private bank can say.
Asset quality has structurally reset: retail is 35% of the book, led by salaried/government employees (the 'Xpress credit' franchise) and the largest home-loan book in the country; GNPA 1.47%, PCR 74%, credit cost 40 bp — we model it rising to 60 bp and the stock is still cheap.
Capital is adequate and self-funded: CET1 12.9% after the FY26 QIP; a ~15.8% ROE on an 11% normalised CET1 base funds 13–14% growth internally and still pays ₹18+ of dividend.

Weaknesses

vs Bank of Baroda / Canara / PNB: Cheaper on paper (0.9–1.0x book) but with 32–35% CASA, thinner capital, weaker retail franchises and 12–13% ROEs that depend on treasury gains — SBI's premium is the price of the only PSU balance sheet that came through the AQR with a better retail book than most private banks.
vs HDFC Bank: We own both. HDFC Bank's ROA is 1.8% vs SBI's 1.1%, so it deserves its 1.6x to SBI's 1.25x; SBI's advantage is CASA, excess liquidity and subsidiaries.

Opportunities

2QFY27 (Nov-26): domestic NIM holding at 3%+ and loan growth at the 14–15% guidance.
Subsidiary value events: SBI Funds IPO, SBI General stake sale, further YES Bank/other stake monetisation.
FPI flows returning to Indian financials; SBI is the most liquid large-cap bank under-owned by foreigners.

Threats

Government ownership (~55%): directed lending, dividend policy and management tenure are policy variables; the ROA ceiling (~1.1%) is structurally below private peers.
NIM: a 2.6–2.7% margin (model basis) is thin; a 20 bp compression on further rate cuts before deposits reprice cuts FY27E EPS ~10%.
Corporate cycle: SBI's corporate book (28% of loans, plus 15% international) is the system's largest; a credit-cost reversion to 80–100 bp would take ROE to 12%.

Compiled from the approved one-pager (Why We Own What We Own, 8 Sep 2026): why-we-own → strengths, catalysts → opportunities, key risks → threats, peer caveats → weaknesses. Editorial mapping pending review. · author: compiled from the approved one-pager

Research reports · upload with a check step

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Internal evidence

Buoyant sources for this name

August 2026 top-30 disclosure — rank 3, Banking, Core. Buoyant AIF I Top 30 Holdings - Aug 2026.pdf
One-pager, "Why We Own What We Own" — p29, 8 Sep 2026. Buoyant_Why_We_Own_What_We_Own_Sep2026.pdf (portfolio as of 31 July 2026)
Sales playbook, Aug 2026 — holdings matrix (PMS/AIF I/AIF II, $31 Jul 2026). Buoyant_Capital_Sales_Playbook_Aug_2026_Full_Holdings.pdf

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Ownership

Shareholding · Jun'26

Promoter	55.47%
Indian Promoters	55.47%
PRESIDENT OF INDIA	55.47%
Public Shareholding	44.53%
Institutions	37.46%
LIFE INSURANCE CORPORATION OF INDIA	8.53%
SBI MUTUAL FUND SCHEMES	3.40%
NPS TRUST SCHEMES	2.22%
HDFC MUTUAL FUND SCHEMES	1.74%
ICICI MUTUAL FUND SCHEMES	1.38%
NIPPON LIFE INDIA MUTUAL FUND SCHEMES	1.32%
KOTAK MUTUAL FUND SCHEMES	1.04%
Non-Institutions	7.06%
Individual < 2 lac	5.60%