FIIs and DIIs Place Big Bets on State Bank of India
Institutional investors are increasingly confident in India’s largest public sector lender, State Bank of India (SBI), as both foreign and domestic stakeholders ramp up their investments amid strong earnings and optimistic analysis.
Impressive Financial Performance
– Profit Surge: SBI reported a standalone net profit of Rs 20,159 crore for the September quarter, reflecting a 10% year-on-year increase from Rs 18,331 crore. This marks the bank’s first profit exceeding Rs 20,000 crore in five quarters, last achieved in March 2024 with a profit of Rs 20,698 crore.
– Stake Increases: Recent shareholding data shows that foreign institutional investors (FIIs) raised their stake in SBI to 9.57% from 9.33%, while domestic institutional investors (DIIs) increased their holdings to 27.65%, up from 25.69%.
Analysts’ Recommendations on SBI
Brokerage firm ICICI Securities reaffirms a “Buy” rating for SBI, with a price target of Rs 1,150 per share, suggesting a potential upside of about 20% from current levels. The firm defines SBI’s core banking operations for FY27E at roughly 1.5 times its book value.
Optimistic Operational Insights
– Management Focus: At the recent ICICI Securities India Conference 2025, SBI’s management stressed their commitment to disciplined growth, emphasizing operational efficiency and sustainable credit expansion.
– Profitability Metrics: SBI’s net interest margin (NIM) has improved quarter-on-quarter and is poised to maintain its upward trend, barring unexpected interest rate fluctuations. The bank experienced a robust 25% year-on-year growth in core fee income for Q2FY26.
Market Position and Technical Outlook
– Current Share Price: Trading around Rs 958, SBI is close to its 52-week high of Rs 971.40. Its market capitalization stands at approximately Rs 8.86 lakh crore, underscoring its stature in India’s financial landscape.
– Valuation Ratios: SBI’s price-to-earnings (P/E) ratio is 10.9, indicating investor confidence in its earnings potential. A price-to-book (P/B) ratio of 1.69 reflects stability typical of large banking institutions.
– Technical Indicators: The 14-day Relative Strength Index (RSI) is at 71.6, suggesting the stock could experience a short-term pullback. However, SBI remains above all eight key Simple Moving Averages, highlighting a sustained bullish trend.
In conclusion, the increasing stakes by FIIs and DIIs in SBI reflect a robust belief in the bank’s growth potential and operational excellence, paving the way for a promising future. With a focus on disciplined growth and strong financial metrics, SBI is well-positioned for continued investor interest and potential gains.