SBI Cards Q4 Results | Credit Cost Eases, Margin Boost Encouraging—But Valuation Worries Linger

SBI Cards Q4 Results Performance with Positive Surprises

SBI Cards and Payment Services Ltd. Published a blended fourth-region FY25 record, with key metrics reflecting each development and ongoing demanding situations. Net earnings stood at ₹530 crore—down 19% YoY but up 39% QoQ—exceeding analyst estimates by thirteen to fifteen. The beat changed into normally driven through decreased operating expenses and a sequential upward push in net interest margins (NIMs), which climbed 54 basis points to 11.2%. This increase helped offset a few issues surrounding earlier quarters’ credit value pressures.

SBI Cards Q4 Results Credit Cost Improvement: Relief After Eight Quarters

The most high-quality highlight in this area was a long-awaited decline in credit prices. After eight straight quarters of accelerated degrees, credit expenses eased to nine. Zero from nine.Five % inside the preceding zone. This fashion offers comfort to buyers who have emerged as increasingly careful about the business enterprise’s asset exceptional. Macquarie called the decline in credit costs “in line” with expectations; however, it applauded the more potent-than-anticipated NIMs and operational efficiency.

Differing Brokerage Opinions: Macquarie Bullish, Morgan Stanley Cautious

Brokerage houses have diverged in their outlooks. Macquarie maintained its ‘outperform’ rating and a target price of ₹1,000, confident in the agency’s margin resilience and cost controls. The organization stated strong anticipated NIMs thru FY26, regardless of minor pressures anticipated from adjustments in revolver blend and re-pricing of the EMI e book, which currently constitutes 35% of the portfolio.

In assessment, Morgan Stanley has taken a more careful stance. Though the corporation raised its fee target from ₹685 to ₹775, it held onto its ‘equal-weight’ rating. Its caution stems from issues about the long-term trajectory of credit expenses and usual valuation.

Asset Quality Metrics Show Signs of Stability

SBI Cards additionally noticed marginal growth in its asset exceptional. Stage 2 NPAs fell from 5.6% to 5.Zero%, and Stage 3 NPAs declined slightly from 3.2% to three.1%. However, Morgan Stanley talked about that a revised Expected Credit Loss (ECL) model has distorted provisioning styles—Stage 2 provisions were increased, while Stage 3 coverage was reduced. This leaves uncertainty around when credit score prices will normalize.

SBI Cards Q4 Results Valuation Remains a Concern

Valuation remains a chief situation, specially for Morgan Stanley. The inventory trades at 33x FY26e P/E and 25x FY27e P/E, making it one of the priciest big-cap financials inside the marketplace. Even below consensus estimates, which can be roughly nine percent higher than Morgan Stanley’s, the valuation remains at 23x FY27e P/E.

SBI Cards Q4 Results Conclusion: Encouraging Metrics But Long-Term Risks Persist

Both brokerages agree that the reduction in credit costs marks a positive development. Still, while Macquarie sees capability upside, Morgan Stanley warns that the marketplace might be too positive approximately a swift recovery. For traders, the contemporary segment requires a balanced view—spotting operational upgrades but staying cautious approximately the street ahead given valuation and provisioning complexities.

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