SAP Faces Twin Tests: Delhi Court Order and a Higher Bar Into Q3
Published on 09/22/2026 at 21:40 | Editorial boerse-global.de
A court ruling in India and a cautious note from Wall Street are converging on SAP just as the software group prepares to report third-quarter results on October 21. The two developments pull in opposite directions: one forces the Walldorfer company to keep servicing a major customer it had cut off, the other warns that the stock's recent climb has left little room for error.
In New Delhi, the Supreme Court ordered SAP's Indian subsidiary on Monday to immediately resume software and support services for energy provider Nayara Energy, which supplies just under eight percent of India's energy needs. The dispute traces back to last summer, when Nayara was added to a European Union sanctions list in July 2025 and SAP blocked access to its support portal days later. Judge Vikas Mahajan treated that move as a provisional breach of contract.
SAP's defense — that support flows through the German parent SAP SE, making European sanctions and German export controls an insurmountable obstacle — did not persuade the court. The judges found that the contracts fall under Indian law, which takes precedence over foreign rules, and that the licenses and services are structured globally rather than tied exclusively to German servers. Restoring support right away is meant to keep operations running smoothly for the Indian heavyweight client. The case underscores a broader hazard for multinational technology firms caught between Western sanctions regimes and local contractual duties in emerging markets.
JPMorgan Stays on the Sidelines
While the legal fight plays out, analysts are already looking past it to the quarterly numbers. JPMorgan left its rating on SAP at "Neutral" with a price target of 175 euros. Analyst Toby Ogg pointed to valuation as the reason for his restraint: the stock's prior advance has raised the bar noticeably for the group, and he expects the upcoming results to land broadly in line with existing market forecasts. The Erste Group Bank also turned more cautious of late, nudging its estimate for adjusted earnings per share slightly lower.
Should investors sell immediately? Or is it worth buying SAP?
The market, for its part, shrugged off the Indian proceedings. SAP shares changed hands at 185.76 euros in Xetra trading, a gain of 1.7 percent on the day. Confidence in the robust cloud business is currently the dominant mood, following a solid revenue increase in the second quarter.
Cloud Growth Meets Deal-Related Drag
That momentum rests on healthy gains in cloud operations, where the Cloud ERP Suite posted a 25 percent rise. Acquisitions, however, have left their mark on the group's earnings metrics, with profitability diluted by the takeovers of Dremio and Prior Labs.
Alongside its operating business, SAP continues to return capital to shareholders. During the trading week of September 14 to 18, the company repurchased 50,000 of its own shares at an average price of 185.57 euros.
In the technology segment, management is sharpening its focus on the potential of European data assets. The assessment is that Europe can compete in the development of artificial intelligence and that the contest is far from settled. CEO Christian Klein had previously opened a discussion about the valuation gap between European and US trading venues.
For now, the stock sits at 183.52 euros in today's session, a modest gain of 0.5 percent, as investors weigh a court order in India against a quarter that JPMorgan believes will merely meet expectations.
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