SBI Cards shares gain after Q1 results, CLSA upgrade; Check price targets

Shares of SBI Cards and Payment Services rose over 4% on Monday, July 27, after the company's June-quarter earnings prompted a mixed response from brokerages, with improving asset quality and lower credit costs offsetting concerns around muted loan growth and margin pressure.

SBI Card Q1 performance

SBI Card reported a 19.5% year-on-year increase in net profit to ₹664.4 crore for the June quarter, helped by lower impairment losses and provisions. Total revenue rose 3% to ₹5,205 crore, while net interest income (NII) remained largely flat at ₹1,676 crore.

Asset quality improved during the quarter, with gross non-performing assets (NPA) declining to 2.04% from 3.07% a year earlier, while net NPA improved to 0.83% from 1.42%.

Cards-in-force increased 7% year-on-year to 2.26 crore, while card spends rose 27% to ₹1.18 lakh crore. The company added 1.02 million new accounts during the quarter, although credit card receivables grew a modest 3% year-on-year.

CLSA upgrades to 'Outperform'

CLSA upgraded SBI Cards to 'Outperform' from 'Accumulate' and raised its target price to ₹730, implying an upside of about 18% from Friday's closing price of ₹618.95.

The brokerage said first-quarter profit was broadly in line with expectations, with lower credit costs offsetting a miss on pre-provision operating profit. While loan growth remained weak and net interest margin contracted by 30 basis points sequentially, CLSA highlighted improving asset quality, a pickup in card acquisitions and retail spending growth in the low teens.

Bernstein remains cautious

Bernstein maintained its 'Underperform' rating with a target price of ₹610, flagging a downside on the last traded price on Friday.

The brokerage said the quarter remained weak despite a 20% increase in earnings, as pre-provision operating profit declined 12% year-on-year and 4% sequentially. It said the recovery in revolver and EMI balances after three quarters of decline was encouraging, but the path to higher returns on assets remains uncertain.

Jefferies sees slower growth

Jefferies retained its 'Hold' rating with a target price of ₹675, which shows a 9% upside on Friday's closing.

The brokerage said profit exceeded its estimate due to lower provisions, while net slippages fell to their lowest level in nearly three years. However, receivables growth remained subdued at 3%, and margins weakened sequentially. It expects credit costs to moderate further but said stronger receivables growth may take time despite higher card additions.

UBS cuts target price

UBS maintained its 'Neutral' rating on SBI Cards and cut its target price to ₹700, implying a 13% upside on Friday's closing price.

The brokerage said first-quarter profit beat expectations due to sharply lower provisions even as NII and operating profit fell short. It noted improving asset quality and lower credit costs but flagged continued pressure on margins and receivables growth. Management expects credit costs to remain stable to lower and anticipates growth to recover in the second half of FY27.

According to Bloomberg analyst recommendations, 12 of the 27 analysts covering SBI Cards have a 'Buy' rating, while five recommend 'Hold' and 10 have a 'Sell' rating. The consensus target price stands at ₹702, implying an upside of about 13%.

Shares of SBI Cards and Payment Services were trading at ₹644.50, up 4.16%, as of 10:48 am. The stock has, however, declined over 25% so far in 2026.

Also Read: Stocks To Buy: Motilal Oswal 'bull case' sees 81% upside for shares of this online marketplace