Is SBI Next HDFC Bank? PSU Bank Stock Overtakes ICICI Bank To Become 2nd Largest Bank Of India; Here's How

State Bank of India (SBI) has just created a new history, by becoming the second largest bank of India. SBI overtook ICICI Bank in terms of market capitalisation, after its share price skyrocketed by a massive 7% and touched a new all-time high of Rs 1,136.85 apiece. The performance is fueled after SBI reported strong Q3FY26 results.

SBI Share Price:

At the time of writing, SBI share price traded at Rs 1131.40 apiece, up by 6.10% on BSE, with market cap of Rs 10,43,521.32 crore. The stock is performing near its new 52-week high of Rs 1,136.85 apiece, which it touched during the opening bell. So far, SBI gained by at least 6.6%.

At 6.6% gains, SBI's market cap rose by Rs 64,967.30 crore compared to previous session's market cap of Rs 9,84,353.06 crore.

At the current market price, SBI's market cap is up by Rs 59,168.26 crore.

Either way, SBI overtakes ICICI Bank in terms of market cap.

Unlike SBI, ICICI Bank share price is trading under pressure at Rs 1398.60 apiece, down by 0.6% on BSE. Its market cap is at Rs 10,00,070.97 crore at the time of writing. This makes ICICI Bank the third largest bank in India in terms of valuation.

That being said, SBI is now racing towards HDFC Bank which currently holds the title of largest bank of India in terms of m-cap.

Following the bearish trend in private banking stocks, HDFC Bank share price is down by 0.5% to trade at Rs 936.80 apiece on BSE, with market cap of Rs 14,41,555.81 crore.

Currently, SBI is just Rs 3.98 lakh away from overtaking HDFC Bank. Whether it will happen soon or in near future, will be keenly watched.

SBI Share Price Recommendation:

The latest rally is SBI is due to strong Q3 results

Data from JM Financial showed that SBI delivered a strong Q3FY26 performance with healthy PAT growth of +24%/+4% YoY/QoQ; +25% above JMFe, also aided by various one-offs- dividend income of Rs 22 billion, IT refund of Rs 7.7bn and Rs 14.3 billion QoQ lower employee benefit provisions. Adjusting for these three one-offs also, PAT was 5% above JMFe. NII rose +9%/5% YoY/QoQ; in-line with their estimates, supported by strong loan growth (+16%/6% YoY/QoQ) and calc. NIM expansion (+5bps QoQ). PPoP surged +40%/20% YoY/QoQ aided by strong forex/treasury income and controlled employee costs. Asset quality continued to improve with gross/net slippages improving 3bps QoQ each and credit cost declining by 10bps QoQ at 0.40%.

Further, SBI's management revised credit growth guidance for FY26 upward to 13-15% and maintained exit NIM guidance of ~3%.

Accordingly, analysts added, "Strong and diversified growth, resilient margins despite deposit pressure, industry-leading asset quality, and large provision buffers underpin SBI's improved earnings visibility and balance-sheet strength. Sustained ~1%+ ROA and healthy mid-teen ROE profile warrant premium valuation vs. historical PSU bank valuations. We maintain BUY rating with a revised target price of INR 1,250, valuing the core bank at 1.4x FY28E standalone BVPS."

SBI reported highest ever quarterly net profit to Rs 21,028 crore, registering growth of 24.5% YoY. While Net Interest Income (NII) for Q3FY26 increased by 9.04% YoY. SBI's asset quality also improved as gross NPA declined by 50 basis points YoY to 1.57%.

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