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Informist, Monday, Jan. 26, 2026

 

By Divya Moolayattil

 

MUMBAI - SBI Cards and Payment Services Ltd. is expected to report a double-digit rise in net profit on year as well as on quarter owing to a sharp decline in credit cost and strong growth in spending and other income. This will be its second consecutive quarterly rise in net profit after five quarters of a decline.

 

The credit card company's net profit for the December quarter is expected to rise to INR 5.45 billion, up nearly 42% on year and 22% sequentially, according to an average of estimates from four brokerages. The highest estimate for the company's net profit is INR 5.83 billion by Elara Securities (India) Pvt. Ltd., while the lowest is INR 4.90 billion by Nuvama Wealth Management Ltd.

 

The company's net interest income for the December quarter is estimated to be INR 23.20 billion, up over 13% on year and nearly 3% on quarter, according to an average of estimates from four brokerages. Estimates for the company's net interest income range from a low of INR 17.55 billion by Elara Securities to a high of INR 18.06 billion by Emkay Global Financial Services Ltd.

 

The Gurugram-based company's net interest margin for the quarter is expected to be 11.2-11.6%, up 60-69 basis points on year. The company had reported a net interest margin of 11.2% for the trailing quarter. "As the impact of the repo rate cut has been fully absorbed, we will hold on to the NIM (net interest margin)," the company had said during its September quarter conference call.

 

The company's credit cost is expected to fall 109-179 bps on year and 14-84 bps on quarter to 7.8-8.5%, according to estimates from two brokerages. "We expect the credit cost to fall below 9% in the coming two quarters of the current financial year," the management had said during the September quarter call.

 

The total income of SBI Cards for the reporting quarter is estimated at INR 45 billion, up from INR 39.4 billion a year ago, according to Motilal Oswal Financial Services Ltd. The company's other income is likely to be INR 27.2 billion, up 14% on year and nearly 3% sequentially, according to the brokerage. The company's fee income for the quarter is seen rising because of strong spending growth led by a recovery in corporate spending. During the quarter, SBI Cards introduced a 1?e on education payments made via third-party applications and on wallet load transactions exceeding INR 1,000.

 

The financial company's operating expenses for the December quarter are likely to rise 18% on year and nearly 2% sequentially to INR 25.2 billion, according to Motilal Oswal. Its tax expenses for the quarter are estimated to rise 40-46% on year and 19-21% sequentially to INR 1.9 billion.

 

The company's gross non-performing asset ratio is seen at 3.1% as on Dec. 31, down 10 bps on year. The provisions for the reporting quarter are expected to fall 4-9% on year and 2.3-8.0% on quarter to INR 12 billion-INR 12.6 billion.

 

The company's loans for the December quarter are expected to be INR 569.6 billion, up nearly 8% on year and 2% on quarter, according to estimates from two brokerages. The muted rise sequentially is due to the slower growth in cards-in-force and spends-to-loan conversion. "Slower cards-in-force growth was due to a cautious lender stance amid continued asset quality stress and rising customer preference toward alternate credit channels," Emkay Global said in its pre-earnings report.

 

The company's receivables are likely to rise over 11% on year and 2% on quarter to INR 610.4 billion in the December quarter, said Nuvama.

 

SBI Cards shares ended Friday at INR 770.55 apiece on the National Stock Exchange, down over 2%. The shares have fallen nearly 15% since the company announced its September quarter numbers. SBI Cards will announce its December quarter earnings Wednesday.

 

Of the 10 brokerage reports on the company available with Informist, five have a "sell" or equivalent recommendation on the stock with an average target price of INR 785, nearly 2% higher than the current market price. Three brokerages have a "buy" or equivalent recommendation with an average target price of INR 1,044 per share. The remaining two have a "hold" recommendation with an average target price of INR 1,013.

 

Following are the December quarter earnings estimates, in INR billion, for SBI Cards and Payment Services from five brokerages in descending order of net profit:

 

Brokerage	Net Interest Income	Net Profit
Elara Securities (India) Pvt. Ltd.	17.55	5.83
YES Securities (India) Ltd.	44.95	5.58
Emkay Global Financial Services Ltd.	18.06	5.55
Motilal Oswal Financial Services Ltd.	17.86	5.40
Nuvama Wealth Management Ltd.	17.60	4.90
Average	23.20	5.45

 

End 

 

Edited by Rajeev Pai

 

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