CLSA on SBI Cards ; O-P, TP Rs 700

2QFY27 PPOP was largely in line while PAT beat number by 7% due to lower credit costs. Credit costs declined 100bp QoQ to multi-quarter lows, & were 40bp better than expected. Retail spend growth moderated to mid-single-digit, driven by the festive timing impact. This led to loan growth declining 2% YoY (similar to peers). However, card acquisition pace has picked up well over past two quarters. Calculated NIM was largely stable at 11.8%, but it should moderate a bit due to rate hikes. Fee income was stronger than our estimate, driven by higher interchange rates

SBI CARDS & PAY SER LTD

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