Why SBI Share Price is Falling

SBI is in focus in the Indian stock market due to the decline in its price.

On budget day, the stock had fallen sharply. Today, 2 February 2026, the stock fell below Rs 1,000 in intraday trade before making a recovery. The stock is down about 5% from its all-time high of Rs 1,083.85 reached on budget day before the correction.

What's driving down the stock?

Read on...

#1 Government Raises Borrowing Targets

In the Union Budget for FY26-27, the Indian government hiked the amount of annual borrowing by 17% year on year to Rs 11.73 trillion (tn).

This took the bond market by surprise because the government had been cutting its debt to GDP, the fiscal deficit, and keeping its borrowing in check over the last few years.

The announcement that the government would now focus on steadily bringing down the debt to GDP implies a change in policy. As long as the central government's overall debt to GDP reduces over the years, big spending via borrowing is back on the table.

The government clearly believes that India's GDP will grow at a good pace and tax collections will be strong. So, it feels comfortable increasing its borrowing for big ticket defence purchases as well as several major schemes promoting high-tech sectors.

The downside to this, is that the bond market will have to absorb this additional borrowing. Thus, the banking sector could be negatively affected.

This is because a higher supply of bonds by the government (to fund the higher borrowing) could result in higher interest rates which banks will have to pass on to consumers.

#2 Profit Booking

The stock price of SBI has delivered good returns to investors over the last few years.

In fact, since the covid lows, the stock is up about 7 times in less than 5 years, compared to the Nifty's gain of about 3 times.

For a largecap stock, this is indeed a satisfactory performance. Thus, profit booking due a perceived negative trigger should not be surprising. Taking some money off the table is a perfectly normal investing strategy followed by investors - both institutional and retail.

What Next for SBI?

On the financial front, the bank has delivered very good performance in the last few years.

The net interest income (NII) has seen good growth, while the non-performing assets (NPA) have improved dramatically.

In fact, net NPAs which were Rs 36,810 m in FY20, dropped to Rs 19,667 m by the end of FY25.

In Q2 FY26, State Bank of India reported net interest income of Rs 500,381 m, a 6% increase YoY. The net profit was Rs 215,045, an almost 8% increase YoY.

The bank will announce its Q3 FY26 results on 7 February.

SBI Financial Snapshot

Source: Equitymaster

The bank recently completed the sale of its 13.18% stake in Yes Bank to Japan's Sumitomo Mitsui Banking Corporation for Rs 88.89 bn. The sale will boost SBI's Q2 FY26 bottom line through proceeds likely to enhance treasury income.

State Bank of India has reaffirmed its growth targets of 12% loan growth and 10% deposit growth in the coming financial year, reflecting confidence in expanding its lending and deposit base.

The loan growth outlook is optimistic. The bank's digital initiatives, particularly the enhancement of its YONO platform and fintech collaborations, will assist improve operational efficiency.

SBI is also expected to focus on improving asset quality and maintaining profitability despite pressures on net interest margins (NIM).

Its strategic emphasis on rural expansion, infrastructure financing, and international market presence will diversify revenue streams and support sustainable growth.

Challenges such as rising competition from private banks and global economic headwinds could impact short-term performance, but continued cost optimisation and strong capital adequacy should help mitigate these risks.

How shares of SBI have performed recently

The stock is recovered to close in the green after a sharp intraday decline today.

However, the share price of SBI is up about 2.5% over the last one month.

Over the last one year, the stock is up about 35%.

The company's stock price hit its 52-week high of Rs 1,083.95 on 1 February 2026 and its 52-week low of Rs 679.65 on 3 March 2025.

SBI Share Price - 1 Year

About SBI

State Bank of India (SBI), a Fortune 500 company, is an Indian multinational and public sector banking and financial services entity headquartered in Mumbai. With a rich legacy, SBI has established itself as the most trusted bank for generations of Indians.

As the largest banking and financial institution in India, SBI boasts an asset base exceeding Rs 61 trillion (tn). Catering to more than 500 million (m) customers, its extensive network includes over 22,500 branches, 63,580 ATMs/ADWMs, and 82,900 business correspondent outlets.

The bank has successfully expanded its operations through various subsidiaries, such as SBI General Insurance, SBI Life Insurance, SBI Mutual Fund, and SBI Card. It also maintains a global presence with operations in 29 countries, managed through 241 offices.

For more details, see the SBI company fact sheet and quarterly results.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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