SBI Cards and Payment Services plunges 7% after Q2 earnings

The net profit of the company was up 52% year-on-year (YoY) and down 16% quarter-on-quarter (QoQ) to Rs 526 crore. The higher YoY profit growth was due to a spike in income and lower provisions.

SBI Cards and Payment Services reported net interest income (NII) growth of 21% YoY and 3% QoQ at Rs 1,116 crore. The net interest margin for Q2FY23 declined by 90 bps to 12.3% on a sequential basis, mainly due to an increase in the cost of funds. Provisions for the second quarter FY23 were down 8% YoY but up 21% QoQ.

Asset quality of the company improved with gross non-performing assets at 2%, down 10 basis points sequentially and 122 bps YoY. Net NPA was down 13 bps to 0.78% during the same period.

At 11.11 am, the scrip was trading 5% lower at Rs 813 over its previous day’s closing price of Rs 857 apiece. The stock has fallen nearly 27% in the past one year, while it has plunged about 12% year-to-date.

As per Trendlyne data, the highest target for stock goes up to Rs 1,383, while the average estimate of Rs 1,148.7 shows an upside potential of around 41% from the current prices.

Out of the 24 analysts covering the stock, 22 of them have strong buy and buy ratings while only two have strong sell and sell ratings.

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