SBI Cards Q1 FY27 Earnings Call — Analysis (NSE: SBICARD)

SBI Cards Q1FY27 net profit rises 20% YoY to ₹664 Cr, driven by sharply lower credit costs; total spends hit an all-time high of ₹1,18,475 Cr, up 27% YoY

30 Jul 2026 · Analysis by Alpha Inflection

The take

Q1FY27 Total Revenue ₹5,205 Cr ( +3% YoY ) . New guidance — FY27 cost-to-income ratio 56% to 58% . New story: Asset quality normalization .

Results

Total revenue ₹5,205 Cr (+3% YoY); PAT ₹664 Cr (+20% YoY) aided by a 301 bps YoY decline in gross credit cost; gross NPA improved to 2.04% (-102 bps YoY); spends ₹1,18,475 Cr (+27% YoY)

Financial highlights

Guidance

Management expects further moderation in credit costs, guides FY27 cost-to-income ratio of 56-58%, and forecasts receivables growth to accelerate in H2FY27, with ROA on track for 4-4.5% medium term

What management committed to

• Receivables growth will pick up from the second half of FY27, driven by higher new acquisitions from Q1FY27 onwards and the festive season in Q3 — H2FY27
• FY27 cost-to-income ratio will be in the range of 56% to 58%, calculated as an average of all four quarters — 56% to 58%, FY27
• ROA will achieve the stated guidance of 4% to 4.5% in the medium term — 4% to 4.5%, medium term
• Gross credit cost will stay within the current range (around 6.5%), subject to any adverse impact of Middle East conflict on asset quality — current range, ongoing
• NIM will be maintained around current levels (~10.8%) through portfolio interventions and smart funding management — around 10.8%, ongoing
• Corporate card spends will remain around 20% of total spends, on the lower end of the industry spectrum — around 20%, ongoing
• SBI Cards will not offer a personal loan on credit card product to new customers at this point of time, though it may evaluate in future — at this point of time
• EMI portfolio will see an uptick during the festive season — Q3FY27

Key themes

Credit quality turnaround and spending momentum

How the narrative shifted

• Asset quality normalization: Multi-quarter improvement in credit metrics with expectations of further moderation; overlay retained as a buffer against geopolitical tail risks
• Digital and UPI spend momentum: UPI on credit card, RuPay push, and hyper-personalization are driving retail spend growth, active rates, and share gains, especially in Tier 2+ cities
• Balanced growth and profitability: Management juggles new account acquisition, credit limit normalization, and cost control to stay on track for 4-4.5% ROA in the medium term
• Geopolitical risk vigilance: Middle East conflict flagged as the key external threat that could impact fuel prices, inflation, and customer cash flows; overlay maintained as a cushion
• Banca-led sourcing advantage: Leveraging SBI's 53+ crore customer base and open-market partnerships like Flipkart to tap a large addressable market, keeping sourcing mix balanced
• Revenue mix shift towards EMI: Focus on spend-to-EMI conversion to offset revolver pressure and protect yield; double-digit share of monthly spends converting to instalments

Operational commentary

• Market position strengthened: 2nd largest credit card player by cards in force, spends, and transactions; spend market share rose to 19.5% (FY26: 18.1%)
• Record new account addition: >1 million new accounts in Q1FY27 (+17% YoY); net card addition of 4.84 lakh was the highest in the industry for the quarter
• Balanced sourcing mix: 47% from Banca (SBI) channel, 53% open market
• BPCL SBI Card co-brand crossed the 5 million cards milestone, becoming one of the largest fuel co-brand portfolios
• UPI on credit card usage grew 13% QoQ, driven by RuPay cards and QR acceptance, notably in department stores, groceries, utilities, fuel, restaurants, and apparel
• Tier 2+ cities contributed strongly to retail spend on the back of UPI on credit card spends
• EMI portfolio focus: spend-to-EMI conversion at point of sale and via app; double-digit percentage of monthly spends converting to instalments; arrangements with OEMs and payment gateways
• Hyper-personalization tech investment helped lift active customer rate to 53% (+1pp)
• Asset quality improvement: Stage 2 and Stage 3 contributions in asset book at lowest post-COVID; ECL annual review consumed ₹180 Cr of overlay, ₹65 Cr provisions released on better mix, while ₹70 Cr overlay retained for geopolitical uncertainty

Analyst Q&A

• Q. Outlook on revolver trend for FY27

  Expect the revolver to continue to be stable where they are right now; witnessed a little bit of downward bias but will stay in similar range; good uptick in acquisitions and EMI initiatives to add to revenue

• Q. Guidance on EMI portfolio growth

  Not giving any guidance in terms of numbers, but festive season will bring an uptick

• Q. Whether SBI Cards offers a personal loan on credit card product and rationale

  Some existing customers carry that asset; but for new customers, currently refraining from offering it; internal evaluation underway

• Q. Guidance on credit cost by exit of FY27

  Not giving guidance in absolute numbers; trend will see further moderation; refraining from percentage guidance

• Q. Outlook on cost-to-income for FY27

  Festive season will see higher cost to income; yearly average expected in the range of about 56% to 58%

• Q. Whether rental spends as a category is being re-opened and trajectory of instance-based fees

  Rentals have started with KYC of landlords but volumes are minimal; instance-based fees down primarily due to late fee reduction; fees expected to improve from H2 on base effect but late fees will remain at current level

• Q. Asset quality across ticket sizes and any stress in IT/salaried segment

  Overall portfolio showing resilience; no cohort giving concern; specifically analysed IT sector and not seeing stress; monitoring continuously

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