SBI Cards Q4 Review: Analysts Say 'Buy' On Better Spends, Asset Quality; Stock Falls

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Shares of SBI Cards & Payment Services Ltd. fell even as analysts reiterated their ‘buy’ calls on the cards issuer after the fourth quarter, citing better asset quality, recovery in spends and a decline in credit costs.

The company saw its profit jump by half over the preceding quarter, in the three months to March, beating estimates. Its margin also expanded and gross non-performing asset ratio fell.

SBI Cards and Payment Services Q4 FY22 (Consolidated, QoQ)

  • Net profit up 50.57% at Rs 580.86 crore.

  • Revenue fell 1.3% at Rs 2,850.31 crore.

  • EBIT up 61.57% at Rs 880.74 crore.

  • EBIT margin 30.9% versus 18.87%.

  • Gross NPA at 2.22% vs 2.4% as of December.

  • Dividend per share: Rs 2.5

Brokerages also expect SBI Cards to be a key beneficiary of digital payment adoption.

Shares of SBI Cards fell more than 3%, the steepest intraday decline in nearly two weeks. Of the 24 analysts tracking the company, 23 suggest a ‘buy’ and one recommends a ‘sell’, according to Bloomberg data. The average of 12-month consensus price target implies an upside of 40.4%.