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Informist, Wednesday, Jul. 22, 2026

 

By Pratiksha

 

NEW DELHI – SBI Cards and Payments Services Ltd.'s net profit is seen rising on year for the fourth consecutive quarter on the back of a fall in credit cost and provisions, according to brokerages tracking the company. However, subdued income growth is expected to limit the rise in net profit for the June quarter. 

 

The non-banking financial company's bottom line is likely to increase over 14% on year to INR 6.36 billion in the June quarter, according to the average of estimates from five brokerages. It is expected to rise over 4% sequentially. Nuvama Wealth Management Ltd. has the lowest estimate for the company's net profit for the June quarter at INR 5.71 billion, while Bank of America Global Research Ltd. has the highest estimate at INR 6.78 billion. The company will announce its June quarter earnings on Friday.

 

Kotak Securities Ltd. expects credit cost to decline 316 basis points on year and 123 bps on quarter to 6.5% in the June quarter. "We expect management to keep guiding for lower credit costs from hereon for the medium term," it said in a report. Meanwhile, Motilal Oswal Financial Services Ltd. expects the Gurugram-based company's credit cost to decline to 7.5-7.6% in the June quarter from 7.7% in the March quarter and 9.6% in the June quarter a year ago.  

 

Brokerage Motilal Oswal expects card spends to have grown modestly in the reporting quarter, aided by steady growth in both corporate and retail spends. Card spends for the March quarter rose 31% on year to INR 1.15 trillion. Retail spends, which make up the bulk of total spends, rose 13% on year to INR 897.86 billion. Corporate spends nearly tripled year on year to INR 255.64 billion. "Spend growth (in the June quarter) would have a higher share of growth from corporate sector," Kotak Securities said.

 

Some brokerages expect the credit card company's provisions to fall on year as well as sequentially. While brokerage Motilal Oswal expects provisions to decline over 21% on year to INR 10.6 billion in the June quarter, Kotak Securities sees provisions falling around 31% on year to INR 9.3 billion. The company's provisions were at INR 10.97 billion in the March quarter. 

 

The company's net interest income is seen almost flat on year as well as on quarter at INR 16.83 billion for the quarter ended June, according to the average of estimates from five brokerages. "We expect muted revenue growth at 3% yoy led by slower growth in receivables (lower translation of spends), pressure on NIM (net interest margin) due to higher cost of funds and slower fee income growth," Kotak Securities said. "NII (net interest income) growth is expected to be flat yoy (year on year) on the back of ~5% yoy growth in receivables (share of revolvers likely to remain unchanged quarter-on-quarter)," it added. 

 

Motilal Oswal sees the company's asset quality improving annually, with the gross non-performing asset ratio seen falling to 2.5% as of Jun. 30 from 3.1% a year ago. It expects the net non-performing asset ratio to fall to 1.1% as on Jun. 30 from 1.4% a year ago. 

 

Analysts will watch out for SBI Cards' commentary on credit cost, margins, and the outlook for recovery in revenue growth. Shares of the company have fallen almost 7% since it declared its earnings for the March quarter on Apr. 27. At 1242 IST, shares of the company were over 3% lower at INR 625 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 957 per share. Four brokerages have a "sell" rating at an average target price of INR 766, and three recommended holding the stock at an average target price of INR 705.

 

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

 

Brokerage	Net interest income	Net profit
Bank of America Global Research Ltd.	16.90	6.78
Motilal Oswal Financial Services Ltd.	16.70	6.60
Kotak Securities Ltd.	16.59	6.44
Anand Rathi Share and Stock Brokers Ltd.	17.16	6.26
Nuvama Wealth Management Ltd.	16.78	5.71
Average	16.83	6.36

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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