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Prabhudas Lilladher Report
SBI Cards and Payment Services Ltd. reported a mixed quarter with higher other income and lower operating expenses driving profit after tax beat of Rs 0.7 billion. Strong growth of 41% YoY in spends and 30% YoY in receivables are some of the positives.
SBI Cards revised their expected credit loss model resulting in additional credit costs of 20 basis points, but management expects it to moderate gradually. It also looks to add 900,000-1 million accounts on quarterly basis, going ahead.
Further, average spends of newly acquired customers stands higher in Q4 than earlier existing customers, thereby aiding growth.
Rerating can happen when revolver mix edges higher and company shows moderation in credit costs, going forward.
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