Rating Overview and Context
On 11 August 2025, MarketsMOJO revised its assessment of State Bank of India (SBI) from 'Sell' to 'Hold', reflecting a significant improvement in the company's overall mojo score, which rose by 19 points from 48 to 67. This 'Hold' rating suggests that while the stock is not currently a strong buy, it is also not recommended for sale, signalling a balanced outlook for investors considering exposure to this public sector banking giant.
The 'Hold' rating is a nuanced position indicating that the stock offers moderate potential returns with some risks or valuation concerns that temper enthusiasm. It encourages investors to maintain their current holdings without adding significantly, pending further developments.
Here’s How the Stock Looks Today: Current Fundamentals and Performance
As of 31 January 2026, State Bank of India remains a dominant player in the Indian banking sector, boasting a market capitalisation of approximately ₹9,82,599 crores. It commands a substantial 47.32% share of its sector by market cap and generates annual sales of ₹4,74,742.62 crores, representing 37.25% of the industry’s total revenue. This scale underscores SBI’s pivotal role in the financial ecosystem.
The stock has delivered robust returns over the past year, with a 41.37% gain, significantly outperforming the broader BSE500 index. Shorter-term performance is also strong, with gains of 1.23% on the most recent trading day, 10.71% over the past month, and 34.38% over six months. These figures highlight the stock’s resilience and appeal in both near and medium-term horizons.
Quality: Strong Lending Practices and Growth
SBI’s quality grade is rated as 'good', reflecting its sound lending practices and credit management. The bank maintains a low Gross Non-Performing Assets (NPA) ratio of 1.73%, signalling effective risk control and asset quality. This is a critical metric for banks, as lower NPAs reduce the risk of credit losses and support stable profitability.
Furthermore, the company has demonstrated healthy long-term growth, with net profit increasing at an annualised rate of 36.98%. This growth trajectory indicates that SBI is successfully expanding its core operations and improving its earnings base, which is a positive sign for investors seeking sustainable returns.
Valuation: Premium Pricing Amidst Flat Recent Financials
Despite its strong fundamentals, SBI’s valuation is considered 'expensive' with a Price to Book (P/B) ratio of 1.9. This premium valuation reflects investor confidence in the bank’s market position but also suggests limited upside from current price levels unless earnings accelerate.
The latest quarterly results show a mixed picture. Profit Before Tax excluding other income (PBT less OI) for the quarter stood at ₹6,585.26 crores, marking a decline of 30.81%. However, non-operating income constitutes a significant 75.15% of the total PBT, indicating that core operations have been relatively flat. Over the past year, profits have only risen by 1.3%, which contrasts with the strong share price performance and may warrant caution regarding valuation sustainability.
Financial Trend: Flat but Stable
The financial grade for SBI is 'flat', reflecting the recent stagnation in core profitability despite strong long-term growth trends. This suggests that while the bank’s fundamentals remain solid, near-term earnings momentum has slowed, possibly due to macroeconomic factors or sector-specific challenges.
Investors should note that the bank’s Return on Assets (ROA) stands at 1%, which is respectable but not indicative of rapid expansion. The flat financial trend advises a measured approach, balancing the bank’s scale and quality against current earnings dynamics.
Technicals: Bullish Momentum Supports the Hold Rating
From a technical perspective, SBI’s stock exhibits a 'bullish' grade, supported by consistent price appreciation and positive momentum indicators. The stock’s recent gains of 15.36% over three months and 9.71% year-to-date reinforce this view, suggesting that market sentiment remains favourable.
High institutional holdings at 37.53% further bolster confidence, as these investors typically possess greater analytical resources and tend to support fundamentally sound companies. This institutional backing can provide stability and reduce volatility, which is an important consideration for investors.
Implications for Investors
The 'Hold' rating on State Bank of India reflects a balanced investment proposition. The bank’s strong quality metrics, market leadership, and bullish technicals provide a solid foundation. However, the expensive valuation and flat recent financial trends suggest limited immediate upside, advising investors to maintain existing positions rather than aggressively accumulate shares.
For long-term investors, SBI remains an important portfolio component due to its scale, credit quality, and growth potential. Those seeking capital appreciation may wish to monitor upcoming earnings releases and sector developments closely to reassess the stock’s outlook.
Our current monthly pick, this Mid Cap from Automobile Two & Three Wheelers, survived rigorous evaluation against dozens of contenders. See why experts are backing this one!
- - Rigorous evaluation cleared
- - Expert-backed selection
- - Mid Cap conviction pick
Summary
In summary, State Bank of India’s 'Hold' rating as of 11 August 2025 remains appropriate given the current data as of 31 January 2026. The bank’s strong credit quality, market dominance, and bullish technicals are tempered by an expensive valuation and flat recent earnings. Investors should consider these factors carefully when making portfolio decisions, recognising that the stock offers moderate growth potential with some valuation risk.
Maintaining a balanced view on SBI aligns with prudent investment strategy, especially in the context of evolving economic conditions and sector dynamics.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
