SBI Cards and Payment Services reported a 75% YoY surge in Q2 FY27 profit to Rs 778 crore, aided by significant improvements in asset quality and credit costs. Revenue grew 4% to Rs 5,141 crore. The company maintains a cautious outlook on funding costs while expecting retail spends to accelerate in the second half of the year.
SBI Card Q2 FY27 Results: Profit Climbs 75%
Revenue from operations reached Rs 5,141 crore, while Profit After Tax (PAT) stood at Rs 778 crore.
Reader Takeaway: Improved asset quality and lower credit costs boosted profits, though rising borrowing costs remain a key margin pressure point.
What just happened
SBI Cards and Payment Services Ltd announced a 75% year-on-year surge in net profit to Rs 778 crore for the second quarter of FY27. This growth was primarily driven by lower credit costs and a 95 basis point reduction in Gross NPA, which now stands at 1.9%. Revenue growth remained steady at 4%, totaling Rs 5,141 crore, as the company balanced risk management with a record Rs 95,299 crore in retail spends.
Why this matters
The company’s ability to shrink its bad loan book while expanding its user base by 8% reflects disciplined underwriting. The addition of over 1 million new accounts suggests that demand remains robust. Investors should note that the firm is maintaining a management overlay of Rs 100 crore, indicating a proactive approach to potential macroeconomic volatility.
Business and Operational Performance
New product launches, including the Google Pay Flex SBI Card, are fueling digital adoption. Retail spend momentum remains a focus area, with online transactions accounting for nearly 63% of total retail spends in the first half of the year. Management maintains a full-year retail spend growth forecast in the mid-to-high teens.
Risks to watch
Funding costs rose by 18 basis points quarter-on-quarter, putting pressure on Net Interest Margins (NIMs). Additionally, management cited global geopolitical conflicts and persistent inflation as external variables that could impact household cash flows and repayment capabilities. The cost-to-income ratio currently stands at 58.7%, landing within the company’s targeted 57-59% range for the fiscal year.
What to track next
The market will be watching for growth in receivables in the second half of the year. Increased spending during the festive season, combined with the company’s efforts to optimize borrowing costs, will determine if the current profit trajectory is sustainable in the coming quarters.