PSU banks sink up to 40% in 2025. Can SBI’s leadership, policy tailwinds drive a comeback?

Stocks of nationalist assemblage banks person had a lackluster tally connected Dalal Street successful 2025 truthful far, importantly underperforming not conscionable backstage banks but besides the broader Nifty, with immoderate falling by up to 40%. With the tailwinds of little involvement rates, the RBI’s accommodative stance, and decent earnings, tin PSU banks technologist a comeback? Here’s what experts say.

The mean year-to-date (YTD) instrumentality of PSU banks stands astatine -9%, compared to 8% for Nifty Bank and 2.5% for the Nifty during the aforesaid period.

The biggest loser successful the battalion has been Punjab & Sind Bank (PSB), which has fallen 40%, followed by Central Bank of India and UCO Bank, which person declined by 32% and 28%, respectively. Next successful enactment are Indian Overseas Bank and Bank of Maharashtra (BoM), whose stock prices person eroded by 27% and 4%.

Apart from SBI, Indian Bank, Bank of India (BoI), Bank of Baroda (BoB), and Union Bank person delivered affirmative returns of up to 12%.

For the assemblage to fire, India’s largest lender the State Bank of India (SBI) indispensable instrumentality the lead. SBI shares person managed to springiness sub 1% returns connected the year-to-date basis. On Saturday, the state-lender announced a little than estimated autumn successful its Q4FY25 nett net though its nett involvement income (NII) stood broadly successful enactment with Street’s estimates.

Six different PSU banks person declared their net portion 5 are yet to denote their results. In presumption of YoY Q4 nett growth, PSB tops the illustration with 125% surge and a stellar 63% leap successful its NII. Indian Bank, IOB, Central Bank and UCO besides reported a double-digit PAT maturation betwixt 32% and 23%. Meanwhile, NII for IOB, UCO and Bank of Maharashtra remained successful double-digits. For Indian Bank it was a 6% uptick and a 4% diminution for Central Bank.

Punjab National Bank (PNB), Bank of Baroda (BoB), Union Bank, BoI and Canara Bank are yet to denote their January-December 4th earnings.

The lenders person witnessed unit connected their nett involvement margins (NIMs) with outgo of funds rising for the fiscal twelvemonth and the complaint cuts person had a bearing connected the margins.

However, the recognition maturation for the wide banking assemblage is expected to amended six months down the enactment due to the fact that of complaint cuts, Sandip Sabharwal said.

CA Rudramurthy BV has advised investors to beryllium “very banal specific” erstwhile it comes to PSU banks, calling SBI and BoB arsenic apical picks.

Following SBI’s earnings, brokerages similar Motilal Oswal, Nuvama person travel retired with their recommendations, maintaining a ‘Buy’ standing connected the stock.

Also Read: SBI shares driblet 2% aft Q4 nett falls 10% YoY. What should investors do?

PSU Banks connected charts

The Nifty PSU Bank index has confirmed a valid inverted head-and-shoulders breakout adjacent the 6,500 level and station the breakout, it rallied, retraced and held steadfast astatine the neckline which is simply a beardown motion of support, Axis Securities said successful a note.

The play illustration hints astatine a bullish emblem breakout successful the making which means that arsenic agelong arsenic the captious enactment of astatine 5,900 (April 7 low) holds, there’s imaginable for a determination toward 7,500 which is simply a 12% upside from the past close, this brokerage said, adding that a decisive interruption supra 6,840 volition beryllium cardinal for the bulls to enactment successful charge.

ETMarkets.com

(Disclaimer: Recommendations, suggestions, views and opinions fixed by the experts are their own. These bash not correspond the views of the Economic Times)