SBI Cards Q2 Result: Net Profit Falls 33%, Total Income Jumps 8%

In the second quarter, SBI Card reported interest income of Rs 2,290 crore, marking a 20 per cent increase from Rs 1,902 crore in the same period last fiscal year

SBI Cards and Payments Services Ltd., a subsidiary of India's largest state-run lender, State Bank of India, reported a 33 per cent decline in net profit for the quarter ending September 30, according to financial results released on Tuesday. The company's net profit for the quarter was Rs 404 crore, down from Rs 603 crore in the same period last year.

Total income for the September quarter increased to Rs 4,556 crore, representing an 8 per cent rise from Rs 4,221 crore in the previous year.

In the second quarter, SBI Card reported interest income of Rs 2,290 crore, marking a 20 per cent increase from Rs 1,902 crore in the same period last fiscal year. However, the net interest margin declined to 10.6 per cent, down from 10.9 per cent in the June quarter.

The company's asset quality deteriorated in the July-September period, with the gross non-performing assets (NPA) ratio rising by 22 basis points to 3.27 per cent, up from 3.06 per cent in the previous quarter. Meanwhile, the net NPA ratio increased by 8 basis points, reaching 1.19 per, compared to 1.11 per cent in the April-June period.

As of September 30, SBI maintained a majority stake in the company, holding 68.61 per cent of its shares. Mutual funds accounted for 9.89 per cent, while foreign portfolio investors collectively held 9.18 per cent.

Shares of SBI Cards surged on the stock exchanges following the announcement of second-quarter results. The stock reached a high of 5.2 per cent, trading at Rs 702 per share on the NSE, before retreating slightly to close 3.66 per cent higher at Rs 692. In contrast, the benchmark Nifty 50 index rose by 0.52 per cent.

Year-to-date, the stock is down 8.9 per cent and has decreased by 12.45 per cent over the past 12 months.

Among the 27 analysts monitoring the company, six have assigned a 'buy' rating, eight recommend a 'hold,' and 13 suggest a 'sell.' The average 12-month price target from analysts indicates a potential upside of 6 per cent.