Whalesbook
Profit Climbs, Costs Rise
SBI Cards reported strong results for the March quarter, with net profit rising 14% year-on-year to ₹609 crore. This gain was mainly due to higher total income (₹5,187 crore) and lower finance costs. For the full fiscal year, profit after tax increased 13% to ₹2,167 crore.
Asset Quality Improves
The company reported significant improvements in its asset quality. Gross Stage 3 assets fell to 2.41% from 2.86% in the previous quarter. The net Stage 3 ratio also improved, moving to 1.04% from 1.28%. Year-on-year, gross NPAs decreased from 3.08% and net NPAs improved from 1.46%.
Investments Drive Costs Up
Despite the profit growth and improved asset quality, operating costs rose significantly to ₹2,561 crore from ₹2,073 crore a year ago. This increase stems from investments in business expansion and acquiring new customers. Meanwhile, impairment losses and bad debt expenses fell 12% year-on-year, helping to cushion the impact of higher operating expenditures.
Spending Grows, New Customers Slow
Card spending remained strong, with total spends up 31% year-on-year to ₹1,15,350 crore for the quarter. Active cards grew 6% to 2.21 crore. However, the rate of new customer acquisitions slowed, dropping to 917,000 from 1.1 million a year earlier.
Strong Capital Position
SBI Cards maintained a strong financial position, with its capital adequacy ratio at 25.5% and Tier-1 capital at 20%. These levels are well above regulatory requirements, offering significant capacity for future growth and risk management.
Market Reaction
SBI Cards shares closed slightly down at ₹670 on the NSE on Monday. The stock has faced pressure over the past year, dropping more than 22% and lagging broader market indexes.