SBI Card slides over 4.30% after credit card firm reports modest fourth-quarter results; brokerage cuts target

SBI Card Share Price: SBI Cards & Payment Services slipped by 4.30 per cent on BSE on Monday (April 29, 2024) after the company reported modest fourth-quarter results a day ago and brokerage Jefferies cut the share price target.

The stock that began its journey on Monday at Rs 742.00 slipped to the day's low of Rs 718.10, a 4.30 per cent decline from Friday's closing price of Rs 750.40.

SBI Card's stock closed the trading on Monday down by 3.51 per cent, or Rs 26.35, at Rs 724.05.

SBI Card Q4FY24 YoY results

The net interest income of SBI Card was up by 21.4 per cent to Rs 1414.8 core in the fourth quarter against Rs 1165.10 crore in the same quarter  last year.

It was slightly below Zee Business research's estimate of Rs 1,420 crore.

Its profit after tax (PAT) was higher by 11 per cent to Rs 662.4 crore in Q4 against Rs 596.5 crore YoY. It was above analyst estimates of Rs 570 crore.

Gross non-performing assets increased to 2.76 per cent in the quarter under review from 2.64 per cent QoQ, below the estimates of 2.8 per cent. 

Its net non-performing assets (NNPA), on the other hand were 0.99 per cent in Q4 against 0.96 per cent QoQ. it was slightly below research estimates of one per cent.

Other Q4 results features

New account volumes were down by 24.9 per cent.

Card-in-force grew by 13 per cent YoY.

Spends grew by 11 per cent YoY against estimates of 30 per cent.

Retail spends were also up by 25 per cent YoY

Corporate spends were down by 35 per cent.

Receivables meet research estimates as it grew by 25 per cent YoY.

Market share cards in focus was 18.6 per cent compared to 19.7 per cent.

Market Share spends were 17.8 per cent against 18.2 per cent.

Credit cost was up by 50 per cent YoY and seven per cent QoQ.

Revolvers were flat at 24 per cent YoY compared to 23 per cent QoQ.

From concall

There is stress in the overall card industry due to macro factors such as higher leverage and customers taking new cards from others immediately after getting a sanction from the company.

Credit cost to remain high in the near term.

B2B spends were completely halted from mid-February as vendors were gradually transitioning to becoming merchants. Management expects normalisation here by June-July of FY25.

There was significant reduction in rental spend growth, growing at half the pace of overall retail spends.

Lower corporate spending also affected fee income, resulting in a decline of around 13 per cent QoQ.

The company will focus on market share growth.

Jefferies on SBI Card 

The brokerage has maintained a 'hold' call on the credit card firm. It has cut the target to Rs 785 from Rs 830.