CLSA gives ‘Outperform’ call on SBI, Sees 32% Upside Potential

CLSA has reaffirmed its Outperform rating on SBI, setting a target price of ₹1,050, which suggests a potential upside of 32% from the current market price of ₹797. The firm believes SBI is well-positioned, having gained market share for the fourth year in a row—winning customers not just from other public sector banks but also from select private banks.

SBI’s deposit growth was modest, but its CASA (Current and Savings Account) ratio outperformed peers, reflecting a healthy deposit franchise. Asset quality remains robust, with one of the strongest improvements in gross slippage ratios during FY25.

On the downside, net interest margins (NIMs) were under pressure, and CLSA expects FY26 to be a softer year due to continued NIM compression. Despite that, SBI is expected to maintain its strong presence in the loan market over the next two years.

Looking ahead to FY27, CLSA forecasts return on assets of 1% and return on equity between 14% and 15%. Additional profit upside could come from better-than-expected treasury gains and potential value unlocking through divestment of its stakes in Yes Bank and NSE.