SBI sheds over $11 billion in market value in 2 sessions on margin squeeze, disappointing earnings

Synopsis

NSE ​data showed the heaviest fresh call writing on SBI's 1,000 strike on Monday, ​signalling that investors expect any near-term rebound in the stock's price to likely be capped at that level.

State Bank of India shed more than $11 billion in market value over two sessions on narrowing margins and a disappointing fourth-quarter earnings miss that brokerages warned could signal a tougher profitability cycle ahead.

Shares of India's largest lender by customers dropped 4.5% to a year-to-date low of 973.60 rupees on Monday, extending ‌Friday's near-7% ⁠post-results fall.

The ⁠selloff brought the stock down more than 10% in two sessions, wiping out $11.3 billion.

NSE ​data showed the heaviest fresh call writing on SBI's 1,000 strike on Monday, ​signalling that investors expect any near-term rebound in the stock's price to likely be capped at that level.

About 95 million shares changed hands over ​the two sessions, almost five-fold the 30‑day ⁠average of 18.7 ‌million.

Analysts said the lender's fourth-quarter earnings miss reinforced ​concerns that ​Indian banks are entering a tougher profitability cycle, with ⁠rising funding costs beginning to erode lending margins.

SBI on Friday reported a narrower net interest margin of 2.8% for the quarter, compared with 2.98% in the previous three-month period, and also missed analysts' profit estimate.

"NIM compression is becoming more visible as funding costs reprice faster," JP Morgan said on Monday, adding that earnings momentum could moderate in the coming quarters.

"Core earnings were underwhelming, with ‌incremental margins tightening," Bernstein said, cautioning that upside catalysts may be limited without a stabilisation in margins.

SBI's asset quality ​remained a key ​positive, with bad ⁠loans and credit costs staying benign, brokerages said, but warned it may not fully offset pressure on net interest income from margin compression.

Nonetheless, analysts retained ​a constructive long‑term view, citing the bank's strong balance sheet, scale and market leadership.

The two-session selloff erased SBI's year-to-date gains, leaving the stock down 0.8% in 2026, though it still outperformed the benchmark Nifty 50's 8.8% drop.

(Reporting by Kashish Tandon and Pranav Kashyap in Bengaluru; Editing by Mrigank Dhaniwala, Sherry Jacob-Phillips and Janane Venkatraman)

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