SBI Cards and Payment Services Limited , India's second-largest credit card issuer, has reported a 10% year-on-year (YoY) increase in profit after tax (PAT) for the second quarter. The company's financial results showcase robust growth in key metrics despite a challenging economic environment.

Financial Highlights

• Profit After Tax (PAT): ₹445 crore, up 10% YoY
• Total Revenue: ₹5,136 crore, up 13% YoY
• Total Spends: ₹107,063 crore, up 31% YoY
• Cards-in-Force: 2.15 crore, up 10% YoY
• Receivables: ₹59,845 crore, up 8% YoY

Key Performance Indicators

SBI Cards demonstrated strong performance across various metrics:

Business Growth

The company reported significant growth in its business volumes:

• New Accounts: 9.36 lakh, up 4% YoY
• Retail Spends: ₹89,611 crore, up 17% YoY
• Corporate Spends: ₹17,452 crore, up 218% YoY

Management Commentary

Salila Pande, Managing Director & CEO of SBI Cards and Payment Services Limited, stated, "Our Q2 results reflect the company's resilience and adaptability in a dynamic market environment. The substantial growth in spends, particularly in the corporate segment, underscores our strategic focus on diversifying our portfolio and capitalizing on emerging opportunities."

Strategic Initiatives

During the quarter, SBI Cards launched three marquee co-branded products:

1. PhonePe SBI Card
2. Flipkart SBI Card
3. IndiGo SBI Card

These partnerships aim to enhance the company's market presence and offer tailored benefits to customers across various segments.

Asset Quality and Provisions

The company's asset quality showed improvement, with Gross NPA decreasing by 43 basis points YoY to 2.85%. However, Net NPA increased marginally by 10 basis points to 1.29%. SBI Cards made an additional provision of ₹28.05 crore on its standard portfolio, anticipating increased spending during the festive season.

Outlook

With a strong capital adequacy ratio of 22.5% and a growing cards-in-force base, SBI Cards is well-positioned to capitalize on the increasing adoption of digital payments in India. The company's focus on strategic partnerships and product innovations is expected to drive future growth and market share expansion.

As the Indian economy continues to recover, SBI Cards' robust performance in Q2 sets a positive tone for the remainder of the fiscal year, with potential for further growth in spends and card acquisitions.

SBI Cards and Payment Services , India's second-largest credit card issuer, reported mixed financial results for the recent quarter, with improved asset quality and significant growth in receivables.

Financial Performance

SBI Cards posted a net profit of ₹445.00 crore for the quarter, up 10% from ₹404.00 crore in the same period last year. However, this fell short of the average analyst estimate of ₹593.00 crore.

The company's revenue saw a healthy increase, rising 12.2% year-on-year to ₹4,961.00 crore from ₹4,421.00 crore in the previous year's corresponding quarter. This growth was primarily driven by higher spend-based income and increased interest income.

However, SBI Cards reported a decline in quarterly EBITDA to ₹1,220.00 crore, down from ₹1,250.00 crore in the same quarter last year. The company's EBITDA margin also decreased to 24.57% from 28.23% year-over-year, indicating reduced profitability efficiency compared to the previous year's performance.

Asset Quality and Receivables

SBI Cards reported significant improvements in asset quality:

• Gross Non-Performing Assets (GNPA) ratio stood at 2.85%, down from 3.07% in the previous quarter and 3.28% in the same quarter of the previous year.
• Net Non-Performing Assets (NNPA) ratio improved to 1.29%, down from 1.42% quarter-on-quarter, though slightly up from 1.19% in the same quarter last year.

The company recorded a substantial 31% increase in receivables, indicating strong growth in its credit card portfolio.

Business Growth

SBI Cards demonstrated strong growth in several key areas:

• Cards-in-Force: The total number of credit cards issued reached 2.15 crore, marking a 10% increase year-on-year.
• Spends: Total card spends surged by 31% to ₹107,063.00 crore, indicating robust consumer spending.
• New Accounts: The company added 9.36 lakh new accounts during the quarter, up 4% from the previous year.

Market Position

SBI Cards maintained its strong market position:

Future Outlook

SBI Cards is focusing on building a profitable card portfolio while reducing credit costs. The company plans a new growth phase emphasizing strong spending trends, digital growth, and operational expansion.

Despite the growth in profit and revenue, the decline in EBITDA and margin performance raises concerns about the company's operational efficiency. The focus on digital initiatives and strategic partnerships may continue to drive growth in the coming quarters, but investors and analysts will likely watch for the company's strategies to improve profitability and manage costs in the face of increasing competition in the credit card space.

Note: All financial figures are in Indian Rupees (₹).