SBIN - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 4.0

📊 Financials: SBI has a market cap of ₹9,04,739 Cr. Current price is ₹980 with a 52-week high/low of ₹999/₹680. PAT this quarter is ₹16,666 Cr vs ₹19,160 Cr in the previous quarter, showing a slight decline. ROCE at 6.37% is modest, while ROE at 17.3% reflects strong efficiency. Debt-to-equity ratio of 12.0 is high, typical for banks, but manageable given the scale of operations.

💹 Valuation: Stock P/E is 12.8, above industry PE of 7.89, suggesting fair-to-premium valuation. Book value is ₹561, giving a P/B ratio of ~1.75, which is reasonable for a large bank. PEG ratio at 0.41 indicates strong earnings growth relative to valuation. EPS is ₹83.1, showing consistent profitability. Dividend yield of 1.63% adds shareholder value.

🏭 Business Model: SBI operates as India’s largest public sector bank, with diversified exposure across retail, corporate, and rural banking. Competitive advantage lies in scale, government backing, and extensive branch network. Business model is resilient, though profitability is sensitive to credit cycles and asset quality.

📈 Entry Zone: Technically, DMA 50 (₹941) and DMA 200 (₹861) suggest strong support zones. Entry is favorable near ₹940–₹960 if price consolidates. Current RSI at 59.9 indicates neutral-to-slightly overbought conditions, suggesting caution for fresh entry at CMP.

🕰️ Long-Term Holding: Strong profitability, scale, and government backing support long-term compounding. Investors can accumulate on dips closer to support zones, while monitoring credit cycle risks and asset quality trends.

Positive

• ✅ Strong ROE (17.3%)
• ✅ Reasonable P/B ratio (~1.75)
• ✅ Dividend yield of 1.63%
• ✅ DII holding increased (+2.11%)

Limitation

• ⚠️ High debt-to-equity ratio (12.0)
• ⚠️ ROCE modest (6.37%)
• ⚠️ Quarterly PAT decline (19,160 Cr → 16,666 Cr)

Company Negative News

• 📉 FII holding reduced (-0.24%)
• 📉 Quarterly profit variation negative (-9.09%)

Company Positive News

• 📈 DII inflows (+2.11%)
• 📈 Strong EPS (₹83.1)

Industry

• 🏭 Banking industry PE at 7.89 highlights fair sector valuation
• 🏭 Sector supported by credit demand and government-backed stability

Conclusion

🔎 SBI is fundamentally strong with scale, profitability, and government support. Valuations are fair, with entry zone near ₹940–₹960. Long-term investors can accumulate on dips, while monitoring credit cycle risks and asset quality performance.

Would you like me to extend this with a peer benchmarking overlay comparing SBI against other large-cap banks, or a sector scan to highlight undervalued financial institutions in the banking space?