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Informist, Thursday, Apr. 23, 2026

By Pratiksha

NEW DELHI – SBI Cards and Payments Services Ltd.'s net profit is seen rising on year for the third consecutive quarter on the back of a fall in credit costs and provisions, according to brokerages tracking the company. However, a contraction in the net interest margin is expected to limit the rise in net profit for the March quarter. 

The non-banking financial company's bottom line is likely to increase about 12% on year to INR 5.97 billion in Jan-Mar, according to the average of estimates from four brokerages. It is expected to rise 5% sequentially. Nuvama Wealth Management Ltd. has the lowest estimate for the company's net profit for the March quarter at INR 5.40 billion, while Anand Rathi Shares and Brokers Ltd. has the highest estimate at INR 6.39 billion. The company will detail its March quarter earnings Monday.

Motilal Oswal Financial Services Ltd. expects the Gurugram-based company's credit cost to decline to 8.1% in the March quarter from 8.3% in the December quarter and 9% in the March quarter a year ago. Brokerage Nuvama too said in a pre-earnings report that credit costs are likely to decline for the company, with card spends expected to remain steady.

Brokerage Motilal Oswal also expects card spends to remain stable, led by corporate spends and steady momentum in retail spends. Customer spends increased 33% on year and 7% on quarter to INR 1.15 trillion in the December quarter.

Most brokerages expect the credit card company's provisions to fall on year as well as sequentially. Both Motilal Oswal and Nuvama see provisions declining around 7% on year to INR 11.6 billion in Jan-Mar. The company's provisions were at INR 12.22 billion in the December quarter. 

Most brokerages expect the company's net interest margin to contract on year as well as on quarter to 10.9% in the March quarter. Net interest margin was at 11% in the previous quarter and 11.2% a year ago. 

The company's net interest income--the difference between interests earned and expended--is seen rising 7.5% on year to INR 17.42 billion for the quarter ended March, according to the average of estimates from four brokerages. However, it is expected to decline 0.5% on quarter. 

Motilal Oswal sees the company's asset quality improving slightly, with the gross non-performing asset ratio seen falling to 2.8% as of Mar. 31 from 2.9% a quarter ago and 3.1% a year ago. It expects the net non-performing asset ratio to fall to 1.2% as on Mar. 31, against 1.3% a quarter ago and 1.5% a year ago. 

Analysts will watch out for SBI Cards' commentary on the outlook for credit cost, margins, and spending growth. Shares of the company have fallen almost 13% since it declared its earnings for the December quarter on Jan. 28. Shares of the company closed 0.8% lower at INR 680.55 Thursday on the National Stock Exchange. 

Brokerages have a mixed view on the company's stock, with four recommending a 'buy' with an average target price of INR 1,017 per share. Five brokerages have a 'sell' rating at an average target price of INR 785, while two recommended holding the stock with target prices ranging from INR 875 to INR 890.

Following are the Jan-Mar earnings estimates for SBI Cards and Payments Services from four brokerages in descending order of the estimate of net profit in INR billion:

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Edited by Tanima Banerjee

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