Asset quality pain continues; margins contract further

Company
30 Oct 2024
5 Min read 
  • SBI Cards reported a miss on PAT at INR4.04b with a 32bp QoQ contraction in margins.
  •  Asset quality remains under pressure with GNAP/NNPA ratio increasing 21bp/8bp QoQ to 3.3%/1.2%.
  •  Spending growth was modest, with corporate spends witnessing a mild uptick in 2Q.
  •  Credit cost increased to 9.0% with the management guiding for elevated credit cost for FY25.
  •  The company anticipates credit costs to peak soon, likely within the next one to two quarters.
  •  Reiterate Neutral with a TP of INR750 (22x Sep26E EPS).
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