Summary
SBI Cards and Payment Services Limited - Q3 FY2026 Earnings Call Summary Wednesday, January 28, 2026, 08:03 PM
Event Participants
Executives 5 Girish Budhiraja (Chief Sales and Marketing Officer), Krishna Kant Bishnoi (Chief Risk Officer), Nandini Malhotra (Chief Credit Officer), Rashmi Mohanty (Chief Financial Officer), Salila Pande (MD and CEO)
Analysts 11 Aditya Vikram, Anuj Singla, Ansh Kumawat, Gao Zhixuan, Gaurav, Jignesh Shial, Kaitav Shah, M.B. Mahesh, Mahrukh Adajania, Nitin Aggarwal, Rohan M.
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Cards-in-force | 2.18 crores | +8% YoY; added 864,000 new accounts in Q3. |
| Total Spends | ₹1,14,702 crores | +33% YoY; highest ever level driven by festive demand and corporate spends. |
| Retail Spends | ₹91,962 crores | +14% YoY; online spends contributed 62.1% of retail total. |
| Corporate Spends | ₹22,739 crores | Strong growth noted; now 19.8% of total spend mix. |
| Total Receivables | ₹57,213 crores | +4% YoY; +3.8% QoQ. Growth remains moderate due to cautious underwriting. |
| Revenue from Ops | ₹5,127 crores | +11% YoY; driven primarily by higher spend-based fee income. |
| Profit After Tax | ₹557 crores | +45% YoY; aided by improved credit costs and lower cost of funds. |
| NIM (%) | 11.0% | -20 bps QoQ; impacted by lower yields and a declining revolver mix. |
| Cost of Funds (%) | 7.0% (Daily Avg) | -5 bps QoQ; benefit of previous rate cuts absorbed; expected to stay stable. |
| GNPA (%) | 2.86% | Flat QoQ; absolute NPA stock reduced by ₹67 crores QoQ. |
| Gross Credit Cost | 8.3% | Improved from 9.0% in Q2 FY26; driven by lower gross write-offs. |
| Capital Adequacy | 24.4% | Strong capital position; internal accruals and RWA optimization aided ratio. |
Geographic & Segment Commentary
- Online & Digital: Online spends accounted for 62.1% of retail spends during 9M FY26, with significant traction in department stores, apparel, and restaurants via UPI-credit card linkage (20% QoQ growth).
- Banca vs. Open Market: Sourcing mix stood at 44% Banca and 56% open market; management plans to increase Banca contribution to 50%-55% using the Yono 2.0 integration.
- Corporate Segment: Strategy shifted to recover lost ground, with corporate spends now reaching ~20% of total mix; management intends to cap this segment at current levels to protect margins.
Company-Specific & Strategic Commentary
- Acquisition Strategy: Management aims to scale new account additions back to 0.9–1.0 million per quarter, focusing on premium and high-quality salaried segments (currently 72% of new sourcing).
- Product & Partnerships: Launched “Khushiyan Unlimited” festive campaign and partnered with Apple for iPhone 17 launch; new co-brands active with IndiGo, Flipkart, PhonePe, and Tata Neu.
- Asset Quality Management: Significant reduction in Stage 2 assets (down ₹844 crores YoY to ₹2,239 crores) and Stage 3 stock indicates improving portfolio health and lower future slippages.
- Digital Transformation: Deep integration with SBI’s Yono 2.0 platform is being leveraged to provide a seamless end-to-end digital journey for Banca customers.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| New Accounts | 0.9 - 1.0 million / quarter | Focus on quality acquisition from digital partners and Banca channel. |
| Net Interest Margin | Downward bias (H2 FY26) | Expect yield compression due to lower revolver mix (23%) and stable cost of funds. |
| Cost-to-Income | 55% - 57% (FY26) | Remains elevated due to higher corporate pass-backs and acquisition investments. |
| Corporate Spend Mix | ~20% of Total Spends | Management intends to maintain current levels rather than expand further. |
| Asset Growth | Lagging spend growth | Receivables growth expected to remain below spend growth in the near term as risk is prioritized over volume. |
Risks & Constraints
| Risk | Context |
|---|---|
| Yield Compression | A structural shift toward transactors and lower-risk EMI assets is reducing the revolver base (23%), leading to a downward trend in portfolio yields. |
| Cost of Funds | While daily averages improved, the disappearance of further rate cut expectations and rising short-term market rates may prevent further COF reduction. |
| Operating Leverage | Opex growth (21%) is outpacing income growth (12%) due to high customer acquisition costs and corporate card reward pass-backs. |
Q&A Highlights
Provisioning & ECL
- Question: Why was the ₹121 crore ECL release not written back to the P&L? (Mahrukh Adajania)
- Answer: Management chose to retain it as a management overlay to reduce volatility ahead of an annual risk model refresh in Q4 (Salila Pande).
Revolver Mix & Yields
- Question: When will margins bottom out given the downward bias in revolvers? (Gao Zhixuan)
- Answer: Revolver assets will likely trend downward for 2-3 quarters. NIMs may shrink in the second half of the year as yields face pressure and cost of funds remains stable (Girish Budhiraja/Rashmi Mohanty).
Operational Expenses
- Question: What is driving the high other operating expenses of ~₹2,000 crores? (Ansh Kumawat)
- Answer: Primarily customer acquisition costs, festive offers/cashbacks, and corporate card pass-backs. As corporate spends stabilize at 20% of mix, this should become more predictable (Rashmi Mohanty/Girish Budhiraja).
Asset Quality Trends
- Question: Are we seeing better recoveries due to customers getting credit elsewhere? (M.B. Mahesh)
- Answer: No, the improvement is due to increased collection intensity, enhanced resources, and better-quality new sourcing leading to lower slippages (Salila Pande).
Key Takeaway
SBI Cards delivered a resilient Q3 FY26 with PAT growing 45% YoY to ₹557 crores, headlined by a significant improvement in gross credit costs (down to 8.3%) and record spends of ₹1.15 lakh crores. While spend growth remains robust at 33% YoY, receivable growth has moderated to 4% as the company prioritizes portfolio health over aggressive lending, evidenced by a declining revolver mix (23%) and a sharp reduction in Stage 2 assets. Strategically, the firm is pivoting toward EMI-based assets to offset yield compression and aiming to scale customer acquisition to 1 million cards per quarter through digital co-brands and SBI Banca integration. Management maintains a cautious outlook on margins for H2 FY26 due to yield pressure but remains confident that the calibrated growth approach will ensure long-term profitability. Forward performance will depend on the successful stabilization of the revolver base and the realization of operating leverage as acquisition costs normalize.
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