PSU Banks FY26: SBI, PNB & Bank of Baroda Ranked

Indian public sector banks have staged one of the most dramatic profit recoveries in the country's financial history. After years of massive NPA write-offs and government recapitalisation rounds, the six largest PSU lenders collectively earned over ₹1.6 lakh crore in net profit in FY26 — a figure that would have been unthinkable five years ago. Yet despite this earnings turnaround, most PSU banks still trade at a discount to book value, and their P/E multiples are a fraction of their private-sector peers.

We pulled live market data from the DocStoX API on 9 July 2026 for SBI, PNB, Bank of Baroda, Union Bank of India, Indian Bank, and Bank of India, and verified every figure before writing a single line of analysis.

PSU Banks at a Glance — 9 July 2026

Here is the full snapshot from live DocStoX data:

• State Bank of India (SBIN): Price ₹1,022.10 | P/E 11.33x | P/B 1.63x | ROE 15.4% | Market Cap ₹9.43 lakh Cr | PAT ₹86,666 Cr | Div Yield 1.67%
• Bank of Baroda (BANKBARODA): Price ₹244.60 | P/E 6.37x | P/B 0.81x | ROE 12.7% | Market Cap ₹1.27 lakh Cr | PAT ₹20,070 Cr | Div Yield 3.43%
• Union Bank of India (UNIONBANK): Price ₹157.26 | P/E 6.18x | P/B 1.00x | ROE 15.7% | Market Cap ₹1.20 lakh Cr | PAT ₹19,430 Cr | Div Yield 3.10%
• Punjab National Bank (PNB): Price ₹103.44 | P/E 6.46x | P/B 0.82x | ROE 13.0% | Market Cap ₹1.19 lakh Cr | PAT ₹18,467 Cr | Div Yield 2.89%
• Indian Bank (INDIANB): Price ₹793.15 | P/E 9.13x | P/B 1.37x | ROE 15.4% | Market Cap ₹1.07 lakh Cr | PAT ₹11,707 Cr | Div Yield 2.32%
• Bank of India (BANKINDIA): Price ₹138.53 | P/E 6.12x | P/B 0.73x | ROE 12.4% | Market Cap ₹0.63 lakh Cr | PAT ₹10,309 Cr | Div Yield 3.27%

All prices and ratios as at close 9 July 2026. PAT figures are trailing annual (FY26). Source: DocStoX data sourced from NSE/BSE audited filings.

State Bank of India — The Anchor, and Why It Commands a Premium

SBI is the undisputed anchor of the PSU banking space. Its net profit of ₹86,666 crore for FY26 makes it not just the largest PSU bank in India by earnings — it is larger than the next five PSU banks on this list combined. At a market cap of ₹9.43 lakh crore, it is also the only PSU bank that comfortably ranks among India's top-10 listed companies by size.

That scale shows up in its valuation premium. SBI trades at P/E 11.33x and P/B 1.63x — meaningfully higher than any other PSU bank on this list. The market ascribes this premium for three reasons: SBI is included in the Nifty 50 (institutional flows must hold it), its branch network of over 22,000+ outlets is genuinely irreplaceable, and its capital adequacy has remained robust even as it lent aggressively into India's infrastructure super-cycle.

SBI's ROE of 15.4% is strong for a bank of its size, but the more telling number is its 3-year ROE average of 17% (DocStoX growth metrics) — meaning the current year is actually a slight moderation from the peak. Its 52-week range is ₹786.55 to ₹1,234.70, and the current price of ₹1,022.10 sits roughly in the middle of that range — not at peak euphoria, not at distress.

Union Bank — Highest ROE in the Peer Group, Yet Trades Near Book

Union Bank of India is the quiet outperformer of FY26. Its return on equity of 15.7% is the highest among all six PSU banks in this comparison — higher than SBI's 15.4% and materially higher than Bank of Baroda's 12.7%. Its 3-year ROE average (from DocStoX growth data) is 16%, confirming this is not a one-year fluke.

And yet Union Bank trades at P/B of just 1.00x — essentially at book value. The market is not yet re-rating it despite the sustained ROE improvement. PAT of ₹19,430 crore is the third-highest in the group. Dividend yield of 3.10% adds income return while investors wait.

The 52-week range of ₹124.64 to ₹205.49 is important context here: the current price of ₹157.26 is 39% below the 52-week high. Union Bank has given back significant gains since the broader PSU-bank re-rating rally of late 2024 and early 2025, even as its fundamentals have continued to improve.

Bank of Baroda — Best Dividend Yield, Cheapest P/B

Bank of Baroda stands out for income-oriented investors. Its dividend yield of 3.43% is the highest of all six PSU banks in this comparison. It also trades at P/B of 0.81x — meaning every ₹100 of book value can be bought for ₹81 in the market today.

The fundamental picture is solid: PAT of ₹20,070 crore, ROE of 12.7% (3-year average of 15% per DocStoX growth metrics, suggesting FY26 is a slight step-down from the 3-year mean), and a book value of ₹321 per share. P/E of 6.37x is among the lowest of the group.

The 52-week range of ₹230.81 to ₹325.50 reflects the broader PSU banking cycle: the current price of ₹244.60 is near the lower end of the range, 25% below the 52-week high. Bank of Baroda is a mid-cycle consolidation story — earnings power is demonstrably higher than pre-FY22, but the stock has corrected as the initial re-rating enthusiasm has faded.

PNB — The NPA Turnaround and What the Market Prices In

Punjab National Bank is arguably the most dramatic turnaround story of the PSU banking sector. PNB was ground zero for India's NPA crisis — the ₹14,000 crore Nirav Modi fraud, huge write-offs, and near-zero profits made it a cautionary tale through FY19-FY21. Today it posts a net profit of ₹18,467 crore, carries a 3-year ROE of 12% (per DocStoX growth data), and yields 2.89%.

Yet the market remains sceptical: PNB trades at P/B of just 0.82x — below book. The book value is ₹130 per share; the stock trades at ₹103.44. The discount to book reflects residual scepticism about whether asset quality is durable at this level of profit growth. The 3-year ROE of 12% versus 10-year average of just 4% (DocStoX growth metrics) tells the story of a bank that has genuinely restructured its balance sheet but still has to prove it across a full credit cycle.

Indian Bank and Bank of India — Smaller, But Showing Quality

Indian Bank deserves a separate mention: at a P/E of 9.13x and P/B of 1.37x, it trades at a premium to the other smaller PSU banks in the group. Its ROE of 15.4% (matching SBI's) and 3-year ROE average of 16% (from DocStoX growth data) justify the relative premium. EPS of ₹86.89 makes it the second highest earnings-per-share name after SBI's ₹90.24.

Bank of India, meanwhile, is the cheapest bank in this list: P/E 6.12x and P/B 0.73x. PAT of ₹10,309 crore is solid, ROE of 12.4% is acceptable, and the 52-week range of ₹108.81 to ₹178.36 shows significant price compression from peak levels. Dividend yield of 3.27% is close to Bank of Baroda's sector-leading 3.43%.

The Valuation Puzzle: Why PSU Banks Trade Below Private Peers

The numbers above raise an obvious question. Union Bank's ROE of 15.7% is comparable to ICICI Bank's 16.1% (per DocStoX data). Yet ICICI Bank trades at P/E of ~18x and P/B of ~2.8x, while Union Bank trades at P/E 6.18x and P/B 1.00x. Why does the market value near-identical ROEs so differently?

Three structural reasons persist. First, government ownership: PSU banks cannot raise capital as freely, cannot execute acquisitions with the same speed, and face wage and HR constraints that private banks do not. Second, credit culture: institutional memory of the 2015-2020 NPA cycle means investors require a longer proof period before re-rating. Third, directed lending: PSU banks absorb more priority-sector and government-scheme credit risk that private banks can selectively avoid.

The counter-argument for FY27: if India's infrastructure and manufacturing capex cycle continues at the pace seen in FY25-26, the very branches, scale, and government relationships that constrain PSU banks in normal times become a structural advantage for credit deployment. SBI's loan book has already benefited from this.

The DocStoX Take

PSU banks in FY26 offer a genuinely unusual combination: earnings at multi-decade highs, dividend yields of 2-3.5%, and valuations still below or near book for most names outside SBI. The structural discount to private banks is real and partly justified — but the earnings proof is also real now. Union Bank's ROE leadership, Bank of Baroda's dividend yield, and SBI's franchise premium are the three clearest anchors for this sector.

Live DocStoX verdicts, fair-value scores, and real-time data for all PSU banks are at docstox.com.

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By the DocStoX Desk — This is for informational purposes only and not investment advice. Please consult a SEBI-registered advisor before investing.