SBI Cards and Payments Services registered disappointing results, even as growth remained strong. Most analysts still hold positive views about the stock and have maintained buy/accumulate recommendations.
There are rising receivables and net interest margin (NIM) compression as the cost of funds has risen substantially. Analysts believe the company will be able to shift a larger component of the receivable mix towards equated monthly instalment (EMI) payments, which should help stabilise the NIM.
SBI Cards reported a net profit of Rs 500 crore, down 3.1 per cent sequentially but up 32 per cent YoY. The net interest income (NII) increased 2.5 per cent QoQ and 14.9 per cent YoY to Rs 1,140 crore. Receivables at Rs 38,630 crore saw muted growth of 2.4 per cent QoQ or 32.6 per cent YoY.
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