Revenue
Margin
Demand
Guidance
Tone
Event Participants
Executives
3 Girish Budhiraja, Salila Pande, Unknown Executive
Analysts
6 Ameya Khandekar, Anand Dama, M.B. Mahesh, Rajiv Mehta, Rohan Mandora, Unknown Analyst
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Cards-in-force | 2.26 crore | +7% YoY; second largest player in cards-in-force, spends, and transactions; highest industry net card addition of 4.84 lakhs in Q1 per RBI data |
| New accounts added | 1 million+ | +17% YoY; sourcing mix balanced at ~47% Banca, ~53% open market |
| Total card spends | ₹1,18,475 crores | +27% YoY, highest ever quarterly level; spend market share at 19.5% vs 18.1% in FY26 |
| Retail card spends | ₹94,033 crores | +14% YoY; growth across consumer durables, furnishing, hardware, apparel, jewelry; online contributes 63% of retail spend |
| UPI on credit card spends | +13% QoQ | Driven by RuPay and QR acceptance; strong in department stores, groceries, utilities, fuel, restaurant, apparel; supports Tier 2+ city retail spend |
| Receivables | ₹58,269 crores | +2% QoQ, +3% YoY; asset growth expected to pick up from H2 FY27 on higher acquisitions and festive season |
| Interest-earning assets | ~55% of book | Stable; revolver rates at 22% of IBNEA |
| Total revenue | ₹5,205 crores | +3% YoY; PAT grew 20% YoY to ₹664 crores driven by significantly improved credit cost |
| NIM | 10.8% | Portfolio yield at 16%; daily average cost of funds stable at 6.6% despite interest rate volatility; cost expected to trend higher |
| Gross credit cost | 6.5% | -116 bps QoQ, -301 bps YoY; continuing reducing trend; expected to stay within current range |
| Gross NPA | 2.04% | -36 bps QoQ, -102 bps YoY |
| Net NPA | 0.83% | Lowest since Q3 FY23; NPA stock at ₹1,191 crores, down ₹179 crores QoQ and ₹544 crores YoY |
| Stage 2 | 3.57% of asset book | -10 bps QoQ, -116 bps YoY |
| ECL overlay | ₹70 crores carried | Annual ECL review consumed ₹180 crores of ₹220 crore overlay; ₹65 crores released on improved portfolio mix; balance kept for geopolitical uncertainty |
| ROA | 3.9% | +51 bps YoY, +26 bps QoQ; on track for medium-term ROA guidance of 4%-4.5% |
| ROE | 16.5% | +72 bps YoY, +89 bps QoQ |
| CAR | 25.6% | Healthy capital position maintained |
Geographic & Segment Commentary
- Retail Spends: Retail spend reached ₹94,033 crores (+14% YoY), with strong growth across consumer durables, furnishing and hardware, apparel and jewelry. Online spends contributed 63% of total retail spend. Active customer rate improved to 53%, up 1 percentage point, supported by hyper-personalization efforts.
- Corporate Spends: Corporate spend share at ~20.33%, within the company's stated 20% (+/-) range. Corporate cards carry no lending option and generate only interchange income, making absolute profitability very low; retail cards drive overall profits.
- Tier 2+ Cities: Continued to contribute strongly to overall retail spend, supported by UPI on credit card spends and RuPay card expansion. Management sees significant headroom for penetration in Tier 2/3 markets.
Company-Specific & Strategic Commentary
- Channel & Acquisition Strategy: Banca and open market sourcing balanced at 47%/53%; focus on acquiring premium customers digitally with high spending patterns and good credit scores.
- Co-brand Portfolio: BPCL SBI Card crossed 5 million cards milestone, one of India's largest fuel co-branded credit card partnerships; new Flipkart co-brand launched; portfolio diversified across lifestyle, retail, travel sectors.
- Digital Capabilities: Continued investment in next-gen digital capabilities and data analytics; mobile app rated 4.5/4.6 on iOS and Play Store; app offers seamless "pay in EMI" conversion at first instance, driving double-digit percentage of spends converting to installment lending.
- RuPay-UPI Strategy: Expanded RuPay card attach on PSPs to grow transaction share and Tier 2/3 penetration; UPI on credit card usage grew 13% QoQ.
- Underwriting & Risk: Strengthened credit decisioning and underwriting standards over past 2 years; Stage 2 and Stage 3 contributions at post-COVID lows; delinquencies reduced for 6 consecutive quarters.
- Awards & Recognition: Won Abby Award for Best Use of Augmented Reality and ET Brand Disruption award for most disruptive customer experience and engagement.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| ROA | 4% to 4.5% medium-term | Q1 FY27 ROA of 3.9% (+51 bps YoY) puts company on track; improved profitability and lower credit cost are key drivers |
| Gross credit cost | Stay within current range (6.5%) | Subject to no adverse impact from Middle East conflict; further moderation expected from portfolio actions taken over last 1.5-2 years |
| Receivables growth | Pick up from H2 FY27 | Driven by higher new acquisitions from Q1 onwards and festive season in Q3 |
| Cost-to-income | 56% to 58% for FY27 (full year) | Festive season to push quarterly cost-to-income higher; yearly average guided in this range |
| NIM | Maintain around current levels (~10.8%) | Active management of funding mix and portfolio interventions; benchmark changes pass cost increases to incremental book |
| Portfolio yield | Maintained in broad range (16%) | Strategies include increasing credit lines for installment customers, growing EMI mix, reducing transactor mix |
| Revolver rates | Stable at current levels (~22%) | Downward bias witnessed; EMI portfolio growth and IBNEA improvements to support revenue |
| Cost of funds | Stable near 6.6%; expected to trend higher | Dependent on policy action on rates; treasury rate hikes in Q4 FY26/Q1 FY27 managed well |
| Credit card industry growth | Consistent growth projected over next decade | India has 121 million credit cards; 350-400 million credit-testable customers with bureau files represent addressable market |
| PL on credit card product | Under internal evaluation; not offered to new customers | Some existing customers carry the asset; company refraining until evaluation complete |
Risks & Constraints
| Risk | Context |
|---|---|
| Middle East conflict / geopolitical uncertainty | Management monitoring for second-order impact on fuel prices, inflation, and customer cash flows; ₹70 crore ECL overlay retained (down from ₹220 crores) for caution; credit cost guidance contingent on no adverse impact |
| Interest rate volatility | Daily average cost of funds stable at 6.6% but expected to trend higher in line with market rates; NIM protection depends on policy action and active funding management |
| Competition from personal loans / NBFC consumer durables lending | NBFC consumer durable loans growing at healthy rate; may cannibalize revolving customers, but management notes EMI (9-11 month tenor) and personal loan (₹1.5-2.5 lakh, 33-36 month tenor) serve different customer needs |
| IT sector job losses (Southern India) | Management analyzed portfolio and found no stress in IT cohort specifically; monitoring continues though external checks indicated possible 300-400 bps delinquency increase in that pool for some lenders |
| Monsoon weakness | Potential impact on rural demand not seen as material near-term given low rural credit card penetration (52-55 million customers, primarily Tier 1-3 cities); retail spend currently strong |
| Regulatory environment | Increased emphasis on responsible lending, customer suitability, digital resilience, cybersecurity; management views measures as positive for long-term industry health but may constrain growth |
| Inflation and customer cash flows | Watchful on inflation impact on customer repayment capacity; delinquencies reduced for 6 straight quarters with entry rates at decadal lows |
Q&A Highlights
Revolver Rates & Revenue Outlook
- Question: How do you foresee revolver accounts trending in the coming financial year? (Unknown Analyst)
- Answer: Revolver expected to stay stable in similar range with a downward bias; strong card acquisitions, better IBNEA, and EMI portfolio growth will add to revenue. No guidance on EMI portion numbers, but festive season will drive uptick. (Salila Pande)
EMI Strategy & Credit Limits
- Question: What initiatives support EMI growth, and will the company resume increasing customer credit limits after being conservative? (Ameya Khandekar)
- Answer: Focus is on "spend to lend" - converting spends to EMI at point of sale or post-purchase; arrangements with all major OEMs and payment gateways; app's "pay in EMI" option drives double-digit percentage conversion of spend. Limit rationalization (both up and down) is ongoing based on risk profile; analytics now enable better income visibility and limit increases where eligible. Rationalization constraint not hurting spends - company outperforming industry. (Girish Budhiraja, Salila Pande)
Personal Loan on Credit Card Product
- Question: Why refrain from offering PL on credit card when it's a good product and we know customer cash flows? (Ameya Khandekar)
- Answer: Some existing customers carry the asset, but new offers are on hold; the company is evaluating it internally. (Girish Budhiraja, Salila Pande)
Credit Cost & Receivables Guidance
- Question: What is the credit cost guidance by exit quarter, and how are receivables growing in FY27? (Rohan Mandora)
- Answer: No numeric guidance given, but credit cost to moderate further; portfolio initiatives over the last 1.5-2 years will continue to improve credit quality. Receivables growth to pick up in H2. Normalization is debatable but moderation is expected. (Salila Pande)
Personal Loan Competition & Spends
- Question: Does NBFC consumer durables loan growth cannibalize card spends and EMI book? (Rohan Mandora)
- Answer: Both products have grown consistently over time; cards cover payment and lending needs while NBFC loans only cover lending. Customers may opt for lower-priced personal loans, which is why EMI pricing is being worked on. Average personal loan ticket is ₹1.5-2.5 lakhs with 33-36 month tenors vs card EMI of 9-11 months - different customer requirements. India remains underpenetrated, and both products can grow together. (Girish Budhiraja, Salila Pande)
Employee OpEx Increase
- Question: What drove the QoQ employee OpEx increase? (Rohan Mandora)
- Answer: Increase is on account of provision for past services liability due to the new wage code change. (Salila Pande)
Slippage / Delinquency Behavior
- Question: Are customers who slip into NPA still doing so quickly without spending time in revolve? (Rohan Mandora)
- Answer: Entry rates into the first delinquency bucket are at decadal lows; credit cost at current level and expected to moderate further. (Girish Budhiraja)
Operating Expenses
- Question: Why are operating expenses rising every quarter, and will they rise further with festive season? (Unknown Attendee)
- Answer: Operating expenses grow in line with business growth - higher new card sourcing and customer spend both carry costs; festive season will increase expenses. Company will evaluate providing a breakup in quarterly updates. (Salila Pande)
Portfolio Yield & NIM Outlook
- Question: Can yield be held or improved assuming stable product mix, and what is the strategy? (Rajiv Mehta)
- Answer: Multiple strategies exist for interest income, including increasing credit lines for existing installment customers to enable more purchases; yield to be kept in a broad range around current levels; any cost increases get passed to incremental book via benchmark changes. NIM should remain around current levels with active funding management. (Girish Budhiraja, Salila Pande, Unknown Executive)
ECL Model Review & Overlay
- Question: With better-performing recent pools, will next year's ECL refresh provide a tailwind? Where does the ₹70 crore overlay sit? (Rajiv Mehta)
- Answer: Data refresh is already driving ECL release; model review done once a year, and the company is comfortable with its robustness - normal changes will come from data refresh, not model relaxation. The ₹70 crore overlay sits in Stage 1 provisions only. (Salila Pande, Unknown Executive)
Corporate vs Retail Spend Mix
- Question: Will the declining corporate spend trend continue, and how will retail spend be increased? (Unknown Analyst)
- Answer: Corporate spend will be 20% plus/minus; it was ~10% only during the BPSP action period, now back to normal range. Retail spend growth of 14% YoY driven by RuPay card expansion, PSP attachments, Tier 2/3 focus, and hyper-personalization tech investments; active customer rate up to 53%. Monsoon impact on retail not visible yet; credit card penetration still low. (Girish Budhiraja)
Total Addressable Market for Credit Cards
- Question: What is the total addressable market / target customer base for the credit card industry? (Unknown Analyst)
- Answer: SBI group has 53+ crore customers; at least 1.5-2 crore are "cardable". Open market co-brands like Flipkart (500+ million transacting customers) add reach. Credit bureaus show 350-400 million customers with credit files. Significant growth available over the next decade. (Girish Budhiraja)
Rentals & Instance-Based Fees
- Question: Has rental as a business model reopened for the company, and when will instance-based fees start moving higher? (M.B. Mahesh)
- Answer: Rentals restarted only where acquiring banks complete landlord KYC; volumes minimal and not a growth category. Instance-based fees are currently down primarily due to lower late fees; should start rising from H2 on base effects, but late fees will remain at current levels. (Girish Budhiraja)
Asset Quality Cohorts & IT Sector Stress
- Question: Is asset quality improving across all ticket sizes, and do you see stress from IT job losses in Southern India? (M.B. Mahesh, Anand Dama)
- Answer: Overall portfolio shows resilience; no specific cohort of concern. IT sector stress analysis done separately - no concerns seen in the book despite external reports of 300-400 bps delinquency increases in that pool for other lenders. Monitoring continues. (Salila Pande)
Cost-to-Income Guidance
- Question: What is the full-year cost-to-income outlook given festive season costs, higher acquisitions, and funding costs? (Rajiv Mehta)
- Answer: No quarterly guidance given; full-year average expected in the range of 56% to 58%. (Salila Pande)
Key Takeaway
SBI Cards delivered a strong Q1 FY27 with PAT up 20% YoY to ₹664 crores and ROA improving 51 bps YoY to 3.9%, driven by sharply lower credit cost of 6.5% (-301 bps YoY). Gross NPA fell to 2.04% and net NPA to 0.83%, the lowest since Q3 FY23, while spend market share rose to 19.5% on total spends of ₹1,18,475 crores (+27% YoY). The company added over 1 million new accounts (+17% YoY) with the highest industry net card addition of 4.84 lakhs, and receivables grew to ₹58,269 crores with asset growth expected to accelerate from H2 FY27. Strategy centers on Banca channel growth, co-brand expansion (BPCL crossed 5 million cards), RuPay-UPI penetration in Tier 2/3 cities, and hyper-personalization driving active rates to 53%. Management guided to ROA of 4%-4.5% medium-term, full-year cost-to-income of 56%-58%, and maintained NIM around 10.8% with credit cost moderation continuing, subject to Middle East conflict impact, IT sector stress, and monsoon-related risks.