SBI Cards shares in focus today as Q4 profit falls on rising defaults

Shares of SBI Cards and Payment Services are in focus today after the SBI arm reported a 19% decline in profits to Rs 534 crore for the March 2025 quarter. This marks a significant decrease from the Rs 662 crore profit reported in the same quarter of the previous year. The decline is primarily attributed to an increase in defaults, impacting the company's bottom line. However, SBI Cards managed to boost its total income to Rs 4,832 crore, up from Rs 4,475 crore a year earlier, with interest income also rising to Rs 2,415 crore from Rs 2,139 crore. Gross non-performing assets (NPAs) increased to 3.08% of gross advances, compared to 2.76% a year ago.

Net non-performing assets also rose to 1.46% from 0.99% at the end of the fourth quarter of the previous fiscal year. The rise in defaults led to an increase in impairment losses and bad debts, which soared to Rs 1,245 crore from Rs 944 crore. For the full fiscal year 2024-25, SBI Cards reported a 20% decline in profit, amounting to Rs 1,916 crore against Rs 2,408 crore in the previous financial year. Despite these challenges, the company's total income for the fiscal year increased to Rs 18,637 crore from Rs 17,484 crore. The balance sheet stood at Rs 65,546 crore as of March 31, 2025, up from Rs 58,171 crore a year ago.

The increase in NPAs could signal potential challenges for SBI Cards as it navigates a competitive market landscape. The company's financial health is closely watched by analysts, given its significant role in the credit card sector. The rise in defaults may necessitate a strategic review to mitigate risks and bolster financial resilience. Experts suggest that while the rise in total income indicates robust operational capabilities, the increase in bad debts highlights underlying vulnerabilities. The market will be attentive to SBI Cards' strategies to address these issues and maintain its growth trajectory amid evolving market conditions.