State Bank of India (SBI): Comprehensive Stock Analysis Report | Scrolls

by KarNivesh | 27 August, 2025

State Bank of India (SBI) Comprehensive Stock Analysis Report- Scrolls.pdf

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Overview of State Bank of India (SBI)

State Bank of India (SBI), established in 1955, is the largest public sector bank in India and a crucial pillar of the Indian banking system. With over 22,405 branches and a robust digital platform (YONO) serving 50+ million users, SBI holds a dominant market share of 22.55% in deposits and 19.06% in advances. Its asset base of ₹73.14 lakh crore represents nearly one-fifth of India’s total banking assets, underscoring its systemic importance.

Financial Performance & Valuation: Between FY21–FY25, SBI posted a revenue CAGR of 15.1% and net profit CAGR of 36.4%, demonstrating resilience despite economic headwinds. In FY25, revenue reached ₹6,50,467 crore, and net profit stood at ₹77,561 crore. Earnings per share (EPS) are ₹86.91, with a healthy Return on Equity (ROE) of 15.93% and improving Return on Assets (ROA) of 1.06%. The bank’s debt-to-equity ratio has improved to 1.25, while its capital adequacy ratio of 13.9% (11.50% CET-1) exceeds Basel III requirements.

SBI trades at a P/E ratio of 9.39x and a P/B ratio of 1.48x, making it attractively valued relative to private peers like HDFC Bank (21.4x P/E) and ICICI Bank (19.4x P/E). Its market capitalization stands at ₹7,45,695 crore, dwarfing PSU peers like Bank of Baroda (₹1,24,604 crore) and Punjab National Bank (₹1,20,906 crore). This valuation premium reflects SBI’s superior franchise and execution track record.

SBI's strong financial growth over the past 5 years, showing consistent increases in revenue, profits, and earnings per share

Growth Drivers & Risks: India’s low credit-to-GDP ratio offers immense growth potential, particularly in rural/semi-urban markets where SBI’s trust and presence are unmatched. Infrastructure financing and international expansion are additional growth levers. The ₹25,000 crore capital raise strengthens SBI’s ability to capture these opportunities.

However, risks include non-performing assets (though improving), regulatory changes, and economic cyclicality. SBI has enhanced its credit appraisal processes, provisioning, and risk management systems to mitigate these challenges. Investments in cybersecurity, process automation, and compliance infrastructure further strengthen its operational resilience.

SBI combines scale, digital innovation, strong financials, and government backing, making it a compelling long-term investment. Its attractive valuations, improving asset quality, and diversified growth avenues provide a solid risk-reward profile. While short-term volatility may persist, SBI’s strategic positioning supports robust long-term prospects.