SBICARD Q2 FY26 earnings call.
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Revenue
₹5,136 Cr
verification pending
Revenue YoY
13%
reported change
EBITDA
Pending
latest reported figure
Source
manual review required
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
SBI Cards reported Q2 FY26 revenue of ₹5,136 crore (+13% YoY) driven by robust total spends of ₹1,07,763 crore (+31% YoY), the highest ever, despite PAT growth lagging at ₹445 crore (+10% YoY) due to elevated operating costs (cost-to-income at 56.8%). Asset quality showed meaningful improvement with Gross NPA declining to 2.85% from 3.07% in Q1, Stage 2 stock down ₹188 crore, and credit cost reducing by 58bps to 9%. Cost of funds improved significantly to 6.4% (down 51bps QoQ), helping NIM hold at 11.2%. Management guided credit cost will decline below 9% in the next two quarters, maintaining FY26 revenue growth guidance of 10-12% and cost-to-income averaging 54-56% (higher side). The company added 9.36 lakh new accounts with cards-in-force at 2.15 crore (10% YoY), maintaining 19% market share. Key risks include elevated credit costs above normalized levels (~6-7%), potential margin pressure from growing lower-margin corporate spends (now 16% of total), and ongoing rental transaction decline (impacting 3-5% of retail spends post-RBI KYC norms). Management indicated focus on quality acquisition over growth acceleration for the next 2-3 quarters until credit costs stabilize.
Colored figures show movement against the previous available record.
Guidance to track
- Management reiterated its full-year revenue growth guidance of 10-12% year-over-year for FY26, supported by strong spend momentum and new co-brand partnerships.
- Management explicitly stated that gross credit cost will be below 9% in Q3 and Q4 FY26, driven by declining Stage 2 and Stage 3 stocks and improved flow rates. However, declined to provide a specific normalized level target.
- Originally guided at 54-56% for FY26, but management indicated it would be at the higher end of this range due to elevated corporate spend-related opex and festive campaign costs in Q2.
- Management maintained its quarterly card addition guidance of 0.9 to 1 million new accounts, continuing focus on quality acquisition through banker and open market channels.
Risks flagged
- Credit costs remain at 9% versus historical normalized levels of 6.5-7%. While management expects improvement, analyst asked about normalization timeline; management declined to provide specific guidance on when costs would return to pre-2024 levels, stating focus on credit cost reduction before accelerating growth.
- Corporate spends (now 16% of total) carry lower interchange rates with higher cashback passed back to customers, compressing income as percentage of spends. Management acknowledged this as the reason fee income grew only 3-4% despite 15% spend growth. Growing corporate mix structurally pressures margins.
- Rental transactions have nearly stopped post-RBI KYC mandate for payment aggregators. Rental was previously 18%+ of retail POS spends; now impacting 3-5% of overall retail spend. Management characterized the impact as 'minimal' given strong overall growth, but this represents a permanent structural shift in category mix.
- Revolver rate at 22% (down from historical levels) due to selective customer acquisition over past 8 quarters. While management expects revolver to increase post-Diwali as transactors convert, the sustained decline reflects deliberate risk aversion that may limit NIM expansion unless underwriting stance changes.
Key quotes
- We are anticipating decline in the write-off numbers, looking at the stocks, looking at the flow rates, and also we will see reduction in the gross credit cost. I can say it'll be below nine.
- Our focus is essentially to get the credit cost down to a reasonable number before we start looking at the growth parameters. As of now, for the next at least two to three quarters, our focus is essentially to get the credit cost down.
- Corporate card side, the asset is hardly anything. So actually ROA is very, very high. However, in this, the income as we have earlier also indicated, the revenue is essentially the interchange and part of that interchange goes back to the customer as cashback. So hence it just skews the opex to sign issues.
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