SBI Q2 Preview: PAT, Margins May Dip Despite Solid Loan Growth; Is India’s Largest Bank Losing Its Edge?

Today, State Bank of India (SBI) will release its financial results for Q2FY26, the quarter that ended in September 2025. According to several brokerages, the largest bank in India is anticipated to report weak results even though loan growth is still robust. Profitability will likely be impacted by margin pressures and higher operating expenses. Rising funding costs and moderate treasury gains are expected to have a sequential negative impact on the bank's net interest income and operating profits. Nonetheless, it is anticipated that strong credit growth, better asset quality, and lower credit costs will somewhat bolster overall performance.

SBI Q2 Results Preview By Prabhudas Lilladher

State Bank of India (SBI) is expected to report a steady performance in Q2FY26, with Net Interest Income (NII) estimated at Rs 41,520 crore, slightly up by 1.1% quarter-on-quarter but nearly flat year-on-year.

Provisions are anticipated to go down by 7% sequentially to Rs 4,426 crore, while Pre-Provision Operating Profit (PPOP) is predicted to drop by 7.8% QoQ to Rs 28,173 crore. At Rs 17,573 crore, the bank's Profit After Tax (PAT) is expected to decline by 8.3% QoQ and 4.1% YoY.

Loan growth may stay very strong at 12.3% YoY, reaching Rs 43.31 lakh crore, indicating continued demand for credit. On the other hand, margins might shrink by 6 basis points to 2.70%. Positively, asset quality is anticipated to improve; the gross non-performing assets (NPA) ratio is predicted to drop 35 basis points YoY and 6 basis points QoQ to 1.77%, and credit costs may ease to 0.41%, indicating stable asset performance and effective risk management.

SBI Q2 Results Preview By ICICI Securities

With Net Interest Income (NII) predicted at Rs 40,631 crore, down 1.1% QoQ and 2.4% YoY, State Bank of India (SBI) is anticipated to have a mixed performance in Q2FY26. Profit Before Tax (PBT) may drop 17.2% QoQ and 13.9% YoY to Rs 21,343 crore, while Pre-Provision Operating Profit (PPOP) is expected to drop 20% sequentially and 16.6% YoY to Rs 24,442 crore.

It is projected that the bank's Profit After Tax (PAT) will fall precipitously to Rs 16,007 crore by 16.5% QoQ and 12.7% YoY.

Advances are expected to rise gradually by 2.6% QoQ and 11.6% YoY, reaching Rs 43.05 lakh crore, indicating sustained loan demand, despite the strain on profitability and margins.

The impact of growing funding expenses is projected to be highlighted by the Net Interest Margin (NIM), which will probably drop by 7 basis points sequentially to 2.83%. Slippages are expected to be Rs 5,700 crore, up 15.1% YoY but down 32.1% QoQ, indicating a modest improvement in the asset quality trend.

SBI Q2 Results Preview By Axis Direct

Due to apparent margin pressures, State Bank of India (SBI) is predicted to have a weak Q2FY26 performance, with its Net Interest Income (NII) anticipated at Rs 40,499 crore, down 1.4% QoQ and 2.7% YoY. The forecast non-interest income is Rs 15,172 crore, which is almost unchanged annually but down 12.5% sequentially due to subdued Treasury gains.

The bank's Pre-Provision Operating Profit (PPOP) is likely to decline 15.8% QoQ and 12.3% YoY to Rs 25,703 crore, mainly impacted by higher operating expenses and lower income growth.

Although asset quality is projected to stay steady with controlled slippages and normalized credit costs, provisions are anticipated to go up by 8% QoQ to Rs 5,138 crore. As a result, net profit is predicted to drop 16.6% YoY and 20.2% sequentially to Rs 15,282 crore, while EPS is anticipated to reach Rs 17.1.

In general, SBI's deposits and advances are expected to surge by 9% and 12% YoY, respectively. Commentary on loan book growth projections, return ratios, and net interest margins (NIMs) are important factors to keep an eye on.

SBI Q2 Results Preview By InCred Equities - InCred Group

With Net Interest Income (NII) projected at Rs 40,800 crore, down 0.6% QoQ and 1.9% YoY due to margin pressures, State Bank of India (SBI) is predicted to have a mixed performance for Q2FY26.

Pre-Provision Operating Profit (PPOP) is likely to decline 16.5% sequentially and 13% YoY to Rs 25,500 crore due to lower income and higher operating costs.

It is anticipated that the bank's Profit After Tax (PAT) would be Rs 16,000 crore, a drop of 13% YoY and 16.8% QoQ.

Margins are expected to compress by 6 basis points sequentially to 2.84%, indicating the impact of rising funding costs. In terms of asset quality, credit costs are found to be down to 39 basis points, improving by 8 basis points YoY and 7 basis points QoQ, indicating better risk management.

Despite pressure on profitability, advances are predicted to jump by a solid 12% YoY and 3% QoQ to Rs 43.22 lakh crore, demonstrating strong loan growth momentum.

SBI Target Price

"With credit growth likely to pick-up in H2FY26 and FY27, SBI is better placed to other PSU and private banks due higher unsecured and NBFC exposure respectively. Bank has usually delivered better than system growth and recent capital raise of Rs250bn may further support growth. Due to higher contingent provision buffer compared to other PSUs, SBI is better placed to navigate the transition to ECL. Core earnings growth could be strong at 22% YoY for FY27E. Stock is currently valued at 1.1x on Mar'27 core ABV; we maintain multiple of 1.3x and retain 'BUY' with TP at Rs960," commented the research analysts of Prabhudas Lilladher.

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