State Bank of India is Rated Buy

Current Rating and Its Significance

MarketsMOJO currently assigns a 'Buy' rating to State Bank of India (SBI), reflecting a positive outlook on the stock’s potential for growth and value creation. This rating indicates that the stock is expected to outperform the broader market over the medium to long term, making it a favourable choice for investors seeking exposure to the public sector banking space. The rating was last updated on 07 February 2026, when the Mojo Score improved from 65 to 71, signalling enhanced confidence in the stock’s fundamentals and technical positioning.

Here’s How the Stock Looks Today

As of 23 February 2026, State Bank of India demonstrates robust financial health and market performance. The company’s market capitalisation stands at a commanding ₹11,14,136 crores, making it the largest entity in the public sector banking sector and accounting for nearly 50% of the sector’s total market value. This dominant position underscores SBI’s critical role in India’s banking landscape.

Quality Assessment

The quality grade assigned to SBI is 'good', reflecting strong operational metrics and prudent risk management. The bank maintains a low Gross Non-Performing Assets (NPA) ratio of 1.57%, which is a key indicator of asset quality and credit discipline. This low NPA ratio suggests that SBI has effectively managed its loan portfolio, minimising credit losses and preserving capital. Furthermore, the bank’s net profit has exhibited a healthy compound annual growth rate of 39.26%, signalling consistent profitability and efficient cost management.

Valuation Perspective

Currently, the valuation grade for SBI is 'fair'. While the stock trades at a premium relative to some peers, this is justified by its market leadership, strong earnings growth, and stable asset quality. Investors should note that the valuation reflects the bank’s sizeable market share and its ability to generate sustainable returns. The fair valuation grade suggests that the stock is reasonably priced, offering a balanced risk-reward profile for long-term investors.

Financial Trend Analysis

The financial trend for SBI is rated as 'positive'. The latest quarterly results for December 2025 highlight record-breaking performance metrics: Profit After Tax (PAT) reached ₹21,028.15 crores, the highest on record; Net Interest Income (NII) surged to ₹45,190.36 crores; and the Gross NPA ratio hit a low of 1.57%. These figures demonstrate strong earnings momentum and effective credit management. Additionally, institutional holdings are high at 37.53%, indicating confidence from sophisticated investors who typically conduct rigorous fundamental analysis before committing capital.

Technical Outlook

From a technical standpoint, SBI is rated 'bullish'. The stock has delivered impressive returns across multiple time frames: 0.76% gain in the last day, 1.45% over the past week, 17.26% in the last month, and a remarkable 66.68% over the past year. This strong price momentum is supported by positive market sentiment and robust trading volumes, suggesting sustained investor interest. The bullish technical grade reinforces the stock’s attractiveness for both short-term traders and long-term investors.

Market Performance and Sector Positioning

State Bank of India’s market-beating performance is evident not only in the short term but also over longer horizons. The stock has outperformed the BSE500 index over the last three years, one year, and three months, reflecting its resilience and growth potential. With annual sales of ₹4,79,872.11 crores, SBI accounts for 37.48% of the public sector banking industry’s revenue, further cementing its leadership position.

What This Rating Means for Investors

The 'Buy' rating on State Bank of India suggests that the stock is well-positioned to deliver superior returns relative to the broader market. Investors can interpret this as a signal that the company’s fundamentals, valuation, financial trends, and technical indicators collectively support a positive investment thesis. The rating encourages investors to consider adding or maintaining SBI shares in their portfolios, particularly those seeking exposure to a large-cap public sector bank with a strong track record of growth and asset quality.

Risks and Considerations

While the outlook is favourable, investors should remain mindful of sector-specific risks such as regulatory changes, interest rate fluctuations, and macroeconomic factors that could impact banking operations. Additionally, valuation remains fair rather than cheap, implying that future returns will depend on continued earnings growth and market sentiment. Monitoring quarterly results and macroeconomic developments will be essential for investors to reassess the stock’s prospects over time.

Summary

In summary, State Bank of India’s current 'Buy' rating by MarketsMOJO, updated on 07 February 2026, is supported by strong quality metrics, fair valuation, positive financial trends, and bullish technical signals as of 23 February 2026. The bank’s dominant market position, consistent profitability, and robust asset quality make it a compelling choice for investors seeking stable growth in the public sector banking domain.

About MarketsMOJO Ratings

MarketsMOJO’s rating system integrates multiple parameters including quality, valuation, financial trends, and technical analysis to provide a comprehensive view of a stock’s investment potential. The Mojo Score and corresponding grade help investors make informed decisions by distilling complex data into actionable insights.

Looking Ahead

Investors should continue to track SBI’s quarterly earnings, asset quality metrics, and market conditions to validate the ongoing suitability of the 'Buy' rating. Given the bank’s scale and strategic importance, it remains a key stock to watch within the Indian banking sector.

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