SBI Share Price Declines 10% in Two Days Following Q4 Earnings Release: Investors Weigh Buying Opportunity Against Caution

State Bank of India's Q4 Results Cause 10.8% Drop in Shares

The shares of State Bank of India (SBI) have experienced intense selling pressure following the lender's March quarter (Q4FY26) earnings, as investors have become cautious due to margin compression and weaker-than-expected quarterly earnings despite record annual profitability. As a result, India's largest lender by customer base has lost nearly 10.8% over two trading sessions, erasing more than $11.3 billion in market value.

Analysts believe that the correction reflects rising concerns that Indian banks could be entering a tougher profitability cycle as rising funding costs and softer interest rates begin weighing on lending margins across the sector. Despite SBI's record annual profit of ₹80,032 crore (up 5.6% year-over-year), the bank's whole-bank net interest margin (NIM) declined to 2.91% in FY26 from 3.08% last year.

SBI's Quarterly Performance

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The bank's quarterly NIM narrowed to 2.8% from 2.98% in the previous quarter, while the whole-bank NIM declined to 2.91% in FY26 from 3.08% last year. Despite the pressure on margins, SBI's core operating performance remained strong during FY26, with total business crossing ₹109 lakh crore and advances growing 16.9%. Deposits also rose above ₹59.7 lakh crore, and asset quality improved further, with gross NPA declining to 1.49% and net NPA improving to 0.39%, both at multi-decade lows.

SBI's Stock Performance

The stock has remained volatile in recent months, declining 8.5% over the last one month and nearly 18.5% over three months. However, the stock is still up 21% over the past year. SBI had touched a 52-week high of ₹1,234.80 in February 2026, while the 52-week low stood at ₹779.40 in May 2025.

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Investors largely focused on the decline in margins and softer-than-expected earnings rather than the bank's record annual profit. Analysts noted that rising funding costs, treasury-related pressures, and some increase in agriculture-related slippages affected quarterly profitability. While margin pressure may continue affecting sentiment in the near term, several experts still believe SBI remains one of the strongest PSU banking franchises from a long-term perspective.

Technical Outlook

Technical analysts believe the stock may continue witnessing near-term volatility until key support levels stabilize. SBI has entered a short-term corrective phase and is currently trading below its 20-day and 50-day moving averages, indicating near-term weakness. The stock is approaching its 200-day moving average, which remains an important long-term support zone. However, some market experts believe the sharp correction may create a buying opportunity for patient investors willing to tolerate short-term volatility.

Expert Views

Antu Eapen Thomas, Senior Research Analyst at Geojit Investments Limited, noted that SBI shares declined after Q4 results missed market expectations, due to yield pressure from corporates shifting to T-bill-linked borrowings and higher MTM losses. However, the bank maintained its guidance of 13-15% credit growth and NIMs above 3%.

Mayank Jain, Market Analyst at Share.Market, stated that SBI has entered a short-term corrective phase and is currently trading below its 20-day and 50-day moving averages, indicating near-term weakness. He added that a sharp fall below the 200-day moving average could increase weakness further, while stronger momentum may return only after the stock reclaims its short-term moving averages.

Santosh Meena, Head of Research at Swastika Investmart Ltd, suggested that long-term investors can consider buying SBI on this dip, as the bank's core fundamentals like healthy loan growth, stable asset quality, and record annual profits remain intact.