Cut in earnings expectations, valuations to cap upside in SBI Card

Festive expenses and weaker margins weighed on earnings, even as GNPA ratios eased and spending momentum stayed strong

SBI Cards and Payment Services’ (SBI Card) Q2FY26 earnings were lower than consensus, due to high provisioning and high operating expenses.

 

Credit costs moderated sequentially though they remained high (net credit costs at 7.7 per cent versus 8.5 per cent in Q1FY26; 8.1 per cent in FY25).

 

New card acquisitions and cards-in-force (CIF) growth were subdued (up 3.5 per cent and 9.8 per cent year-on-year or Y-o-Y, respectively).

 

This was a mixed result with improvement in some metrics offset by deterioration in others.

 

SBI Cards had strong growth in Q2FY26 retail spends (9 per cent quarter-on-quarter or Q-o-Q) and receivables