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SBI
Our verdict on SBI isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Corporate advances grew by 13.37% YoY in Q3FY26, surpassing the 10% target set for the quarter. (3 exceeded, 1 met, 1 missed across 5 tracked commitments)
“Corporate 11,76,303 13,33,564 13.37”
The bank achieved significant double-digit growth in the corporate segment during Q3, surpassing the 10% target. (2 exceeded, 2 met, 1 missed across 5 tracked commitments)
“And the credit growth advice, we had given 12% to 14% credit guidance earlier, we are revising that upwards to 13% to 15% for the current quarter.”
The Cost to Income Ratio for H1FY26 was 48.53%, remaining below the 50% target. (4 met, 1 missed across 5 tracked commitments)
“While we still are sticking to our guidance that the cost to income ratio, our effort is to keep below 50. I am not giving any number whether it is 47, 45. The effort is through the cycle, we would like to maintain the cost to income ratio below 50.”
The bank has reached the 10.02 crore registered user milestone on YONO, marking the baseline for the 20 crore target. (1 in progress, 1 met across 2 tracked commitments)
“Scaling YONO from 10 crore registered users to 20 crores over the next 2 to 3 years is expected to support operating leverage and ROA sustainability.”
The bank completed a ₹25,000 crore QIP in July 2025. Management notes the current CRAR buffer can support ~₹12.4 lakh crore of credit growth. (1 in progress across 1 tracked commitment)
“The CRAR buffer of 3.39% above regulatory requirement can support credit growth of ~₹12.4 lakh crore”
See the full cited Management analysis of SBI
How durable is the business?
SBI is expanding its digital moat by launching Project SARAL to automate retail operations and is building its own AI stack for underwriting and risk scoring, aiming to keep the cost-to-income ratio below 50%. (5 expanding)
“10.02 crore registered users on YONO, 66% of savings account opened through YONO in FY26”
SBI continues to leverage its scale, maintaining a 22.17% share of domestic deposits and 19.24% of advances. It added 14 bps of incremental loan market share YoY, specifically in high-return segments like mortgages. (5 expanding)
“Total Business crossed ₹ 109 Trillion; Deposits at ₹ 59.8 lakh crore; Advances at ₹ 49.3 lakh crore... Sustained domestic market share of over 22%”
The international loan portfolio grew faster than the domestic book, expanding by 14.81% YoY, driven by US operations and GIFT City. (5 expanding across 1 engine)
“Fee Income: 10,852 (Q4FY26); Total Income: 1,40,412 (Q4FY26)”
SBI maintained its dominant market share of over 22% in domestic deposits and advances, with total advances crossing ₹42.5 trillion. (2 expanding, 1 stable)
“Domestic Advances: 41,89,686; Foreign Offices Advances: 7,42,941; Total Whole Bank Advances: 49,32,627”
NII is under pressure as Net Interest Margin (NIM) declined to 2.9% from previous levels, though management maintains a 3% guidance for the full year. The decline is attributed to the repricing of fixed deposits and a reduction in the CASA ratio. (2 contracting, 2 expanding across 1 engine)
“Net Interest Income: 44,380 (Q4FY26); Operating Income: 61,694 (Q4FY26); NIM (Whole Bank) (%): 2.81”
See the full cited Business Model analysis of SBI
Where does growth come from?
SBI is aggressively targeting the 'Green Finance' market, setting a target for a significant portion of its future loans to be environmentally friendly.
“To achieve by 2030: At least 7.5% of domestic gross advances to be Green advances”
The bank plans to unlock significant capital by listing its subsidiaries, specifically SBI AMC, which will strengthen its core capital (CET-1) to fund future loan growth. (+1 more signal)
“We are also seriously... embarked on listing SBI AMC and hopefully in this financial year we will be able to complete, which will result in capital augmentation, CET-1.”
Personal Gold Loans continue to show explosive growth at 86.87% YoY, maintaining its status as a high-growth retail vector with extremely low GNPA (0.06%). (1 steady, 1 accelerating across 2 signals)
“Net NPA 0.39% ... -8 bps YoY growth ... GNPA & NNPA Ratios at two decadal low”
The bank's profitability is being boosted by a significant reduction in 'credit costs' (money set aside for bad loans), which have reached historic lows. — Credit Cost: -1 bps YoY
“Credit Cost 0.37% ... -1 bp YoY growth”
The trend is currently steady but lacks urgency; management confirmed they have candidates for listing but no immediate timeline, having recently raised Rs 25,000 crore via QIP. (1 steady, 2 new trend across 3 signals)
“No, as we mentioned that we definitely have a couple of candidates for listing, but the timing is not very… there is no sense of urgency there, I believe.”
See the full cited Future Growth analysis of SBI
What could break the thesis?
Concentration risk is easing as Infrastructure exposure as a percentage of total domestic advances decreased from 12.05% to 10.41% YoY. (1 easing, 4 stable)
“Infrastructure 4,06,983 (9.71% Share); of which: Power 2,52,718 (6.03% Share)”
Asset quality in these segments is stable to slightly improving. Agri NPA ratio improved to 8.70% (from 9.84% YoY) and SME NPA ratio improved to 3.29% (from 3.75% YoY). However, they remain much higher than the bank average of 1.83%. (2 easing)
“our slippage has also gone up little bit in this quarter, may be Rs. 1,000, Rs. 1,200 crores up in this quarter.”
Slippages in Q1 were driven by SME (₹2,680 cr) and Agriculture (₹2,464 cr). However, management notes a significant 'pull back' (recovery) of ₹1,585 crores shortly after the quarter ended. (5 easing)
“Agri. NPA Ratio % 7.25; SME NPA Ratio % 2.99; Total 1.49”
Operating expenses spiked in the final quarter of the year, a recurring issue where costs are 'bunched' or concentrated at year-end, hurting short-term profitability. [MARGIN_COST]
“little bit increase in the overhead expenses in this quarter... it has gone up by about Rs. 1,500, Rs. 1,700 crores, the overheads.”
Slippage risk is easing. The slippage ratio improved to 0.75% in Q1FY26 from 0.84% in Q1FY25. Fresh slippages were ₹7,945 crores, which is stable compared to Q1FY25 (₹7,903 crores). (1 easing, 2 stable)
“Total non-NPA provisions (not included in PCR) at ₹29,713 crores which are ~158% of Net NPAs”
See the full cited Risk analysis of SBI
Read the full thesis on SBI
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24 Apr 2026AI-generated informational research only. ThesisLoop is not investment advice, a stock recommendation, or a guarantee of returns.