Revenue
Margin
Demand
Guidance
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SBI Cards and Payment Services Limited - Q1 FY2027 Earnings Call Summary Friday, July 24, 2026, 12:30 PM GMT
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; market share 18.6% — second largest player in CIF, spends and transactions |
| New accounts added | 10+ lakh | +17% YoY; net card addition of 4.84 lakh highest in the industry for Q1 FY27 |
| Total card spends | ₹118,475 crores | +27% YoY, highest ever; spend market share improved to 19.5% from 18.1% in FY26 |
| Retail spends | ₹94,033 crores | +14% YoY; online contributes 63% of retail spends; UPI on credit card +13% QoQ |
| Receivables | ₹58,269 crores | +2% QoQ, +3% YoY; growth expected to accelerate from H2 FY27 on higher acquisitions and festive season |
| Interest-earning assets | ~55% of book | Stable QoQ; revolver rates at 22% of IBNEA, expected to stay in similar range |
| Gross NPA | 2.04% | -36 bps QoQ, -102 bps YoY; Stage 2 + Stage 3 mix lowest post-COVID |
| Net NPA | 0.83% | Lowest since Q3 FY23 |
| Stage 2 | 3.57% of book | -10 bps QoQ, -116 bps YoY |
| Gross credit cost | 6.5% | -116 bps QoQ, -301 bps YoY; declining trend over last year, further moderation expected |
| NPA stock | ₹1,191 crores | -₹179 crores QoQ, -₹544 crores YoY |
| Total revenue | ₹5,205 crores | +3% YoY |
| PAT | ₹664 crores | +20% YoY, driven by significantly improved credit cost |
| ROA | 3.9% | +51 bps YoY, +26 bps QoQ; on track for 4-4.5% medium-term ROA guidance |
| ROE | 16.5% | +72 bps YoY, +89 bps QoQ |
| NIM | 10.8% | Portfolio yield at 16%; cost of funds stable at 6.6% but expected to trend higher with market rates |
| CAR | 25.6% | Healthy capital position |
Geographic & Segment Commentary
- Retail Spends: ₹94,033 crores, +14% YoY, with growth across POS and online led by consumer durables, furnishing and hardware, apparel and jewelry. Retail is the primary profit driver, generating both fee and interest income; active customer rate improved to 53% (+1 pp).
- Corporate Spends: 20.33% of total spends in Q1 (vs 21.92% prior quarter); management targets ~20% plus-minus, at the lower end of the industry average of 20-25%. Corporate cards carry no lending option — income is primarily interchange — and profitability is very low; profits are essentially driven by the retail card book.
- Tier 2+ Cities: Continue to contribute strongly to overall retail spend, driven by UPI on credit card and RuPay QR acceptance; a stated priority for expansion along with metros.
- Sourcing Mix: 47% from Banca and 53% from the open market; growing Banca as a channel and acquiring premium customers digitally are stated strategic priorities.
Company-Specific & Strategic Commentary
- Market Position: SBI Cards is now the second largest credit card player in India across cards-in-force, spends and transactions, with 18.6% CIF share and 19.5% spend share.
- Co-Brand & Partnerships: BPCL SBI Card crossed 5 million cards, making it one of the largest fuel co-branded credit card partnerships in India; expanded strategic partnerships for national, regional and local offers; Flipkart co-brand cited as a recent open-market tie-up.
- RuPay/UPI Strategy: UPI on credit card usage grew 13% QoQ across department stores, groceries, utilities, fuel, restaurant and apparel; RuPay card attachments with PSPs are driving transaction and spend share gains, particularly in Tier 2/3 markets.
- Digital & Personalization: Mobile app rated 4.5-4.6 on iOS and Play Store; large tech investment in hyper-personalization enables individual customer offers; active customer rate improved to 53% (+1 pp).
- Lending & Limits: Spend-to-lend focus with arrangements across all OEMs and payment gateways, plus an in-app "pay in EMI" option; double-digit percentage of monthly spend converts to installment lending. Credit limit rationalization — in both directions — is underway using enhanced analytics after a conservative stance during the stressed cycle.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| ROA | 4-4.5% in medium term | Q1 FY27 at 3.9% (+51 bps YoY); improved profitability and credit cost trajectory put company on track |
| Gross credit cost | Stay within current range (~6.5%) | Further moderation expected from underwriting/collection initiatives; subject to no adverse Middle East conflict impact on asset quality |
| Receivables growth | Acceleration from H2 FY27 | Driven by higher new account additions from Q1 onwards and Q3 festive season |
| Cost-to-income | 56-58% for FY27 | Annual average guided; festive season will see quarterly uptick |
| NIM | Maintain around current levels (~10.8%) | Supported by portfolio actions (EMI mix, limit increases) and active cost of funds management |
| Cost of funds | Trend higher in line with market rates | Stable at 6.6% in Q1 despite Q4 FY26/Q1 FY27 rate volatility; dependent on policy action |
| Corporate spend share | ~20% plus-minus | Company comfortable at lower end of industry range of 20-25% |
Risks & Constraints
| Risk | Context |
|---|---|
| Middle East conflict / geopolitical uncertainty | Management retains ₹70 crore ECL overlay (consumed ₹180 crore of the ₹220 crore overlay from prior quarter); monitoring second-order impact on fuel prices, inflation and customer cash flows; credit cost guidance contingent on no adverse impact |
| Rising cost of funds | Daily average cost of funds stable at 6.6% but expected to trend higher with market rates after recent rate volatility; NIM protection depends on yield actions and funding mix management |
| Personal loan competition | NBFC consumer durables lending is growing; some revolver customers may shift to lower-priced personal loans (evidenced by slightly declining revolver rates); management views this as different ticket/tenure segments and is pricing EMI products competitively |
| IT sector job losses in South India | Analyst flagged 300-400 bps delinquency increase in that pool per other lenders and collection agencies; management's separate analysis of its IT portfolio shows no concern, though monitoring continues |
| Regulatory evolution | Increased emphasis on responsible lending, customer suitability, digital resilience, cybersecurity and customer protection; management views measures as positive for long-term industry health but adds compliance burden |
Q&A Highlights
Revolver Rates & EMI Outlook
- Question: How do you foresee revolver accounts trending, and can the EMI portion (33%) increase? (Nilesh Sharma, Monomer Capital)
- Answer: Revolver expected to stay in a similar range with slight downward bias; better IBNEA and EMI portfolio growth will add to revenue; festive season should drive an EMI uptick, though no numeric guidance given (Salila Pande)
EMI Strategy & Credit Limit Rationalization
- Question: What initiatives are driving EMI share, and will conservative credit limits be relaxed to boost spends? (Ameya Khandekar)
- Answer: Spend-to-lend focus with arrangements across all OEMs, payment gateways and PGs; in-app "pay in EMI" option sees double-digit percentage of monthly spend converted to installments; consumer durable price increases are lifting conversion. Limit rationalization is underway in both directions — increasing limits for eligible customers using improved analytics after a conservative phase (Girish Budhiraja, Salila Pande)
Personal Loan on Credit Card Product
- Question: Why refrain from offering PL-on-credit-card products when competitors offer them? (Ameya Khandekar)
- Answer: Some existing customers carry the asset, but it is not being offered to new customers; internal evaluation is underway and the company may consider it in the future (Girish Budhiraja, Salila Pande)
Credit Cost & Receivables Guidance
- Question: What is the credit cost guidance by exit quarter and receivables growth for FY27? (Rohan Mandora, Equirus Securities)
- Answer: No absolute numeric guidance; credit cost will moderate further on the back of underwriting and collection actions over the last 1.5-2 years; receivables growth visible from H2 FY27; "normalization" is debatable but credit cost is on a downward trend (Salila Pande)
Corporate vs Retail Spend Mix & Economics
- Question: What is the growth mix and relative economics of retail vs corporate spend? Will corporate share decline further? (Nilesh Sharma, Monomer Capital)
- Answer: Corporate spends at 20.33% of total (vs 21.92% last quarter); target is ~20% plus-minus and can go below. Corporate cards are non-lending products earning only interchange/fee income — profitability is very low; profits essentially come from the retail card book. Retail spends grew 14% YoY with transaction share gains from RuPay strategy and Tier 2/3 focus (Girish Budhiraja)
ECL Model Review & Overlay
- Question: ECL rates rose QoQ after annual review — any tailwind next year? Where does the ₹70 crore overlay sit? (Rajiv Mehta, Yes Securities)
- Answer: Data refresh will drive ECL releases as asset quality improves; the annual model review will not relax the model, at most enhancement; the ₹70 crore overlay sits entirely in Stage 1, not Stage 2 or 3 (Salila Pande, Unknown Executive)
Rental & Instance-Based Fees
- Question: Is the rental business model returning? What is the direction of instance-based fees? (M.B. Mahesh, Kotak Securities)
- Answer: Rentals have resumed only where landlord KYC is completed; volumes are minimal and measures target incorrect cash-out activity, not fee income generation. Instance-based fees are currently down due to lower late fees; from H2 onwards, base effects will lift them, but not from late fees (Girish Budhiraja)
Cost-to-Income Outlook & IT Sector Stress
- Question: What is the cost-to-income range for FY27? Any stress from IT job losses in Southern India? (Rajiv Mehta, Yes Securities; Anand Dama, Nuvama)
- Answer: Cost-to-income guided at 56-58% annual average; festive season will push quarterly numbers higher. A separate analysis of the IT sector portfolio shows no concern in the book; monitoring continues (Salila Pande)
NIM & Portfolio Yield Protection
- Question: Where do margins settle with rates on pause? What interventions can protect yield? (Anand Dama, Nuvama)
- Answer: NIM should remain around current levels; growing the EMI component adds to yield as transactor share declines; the company managed cost of funds well through the treasury rate spike and will continue scanning the market for the best funding pricing (Salila Pande, Unknown Executive)
Key Takeaway
SBI Cards delivered a strong Q1 FY27 with PAT up 20% YoY to ₹664 crores and ROA at 3.9% (+51 bps YoY), driven by gross credit cost improving 301 bps YoY to 6.5%. Cards-in-force grew 7% YoY to 2.26 crore with industry-leading net additions of 4.84 lakh, while total spends hit a record ₹118,475 crores (+27% YoY), lifting spend market share to 19.5% — making SBI Cards the second largest player across CIF, spends and transactions. Receivables of ₹58,269 crores grew just 2% QoQ, with acceleration expected from H2 FY27 on higher acquisitions and festive demand. Asset quality improved further (GNPA 2.04%, NNPA 0.83%, Stage 2 at 3.57%), with ₹70 crore of ECL overlay retained for geopolitical risk. Strategy centers on RuPay/UPI-led Tier 2/3 expansion, premium digital acquisition, hyper-personalization (active rate 53%) and EMI-led lending growth. Management guided FY27 cost-to-income of 56-58% and credit cost staying within the current range; key watchpoints are Middle East conflict fallout, rising cost of funds and personal loan competition.