SBI Cards | 1QFY27: Good Asset Quality, but PPOP Concerns Continue; UW

Research evidence excerpt

SBI Cards | 1QFY27: Good Asset Quality, but PPOP Concerns Continue; UW

Idea

July 27, 2026 12:06 AM GMT

Morgan Stanley India Company Private Limited+MSBI Cards | Asia Pacific Subramanian Iyer

Equity Analyst

1QF27: Good Asset Quality, but Subramanian.Iyer@morganstanley.comKushan Parikh, CFA +91 22 6118-2234

Kushan.Parikh@morganstanley.com +91 22 6118-1082

PPOP Concerns Continue; UW Sakshi V Chaplot

Research Associate

Sakshi.Chaplot@morganstanley.com +91 22 6118-2228

AlphaSignals Earnings Reaction

Unchanged Meaningful upside Modest revision higher

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: VA consensus data, Workspace consensus data,Company data, Morgan Stanley Research estimates

Although the asset-quality-led beat could create some optimism SBI Cards and Payment Services Ltd (SBIC.NS, SBICARD

IS)

among the Street and investors, we see this more as a phase of

India Financials | India

P&L shuffling where credit costs move lower, NIM continues to Stock Rating Underweight

moderate and cost/income rises. Valuation appears expensive. Industry View Attractive Price target Rs500.00

Up/downside to price target (%) (19)

1QF27 summary: The 5% miss vs. MSe was driven by PPOP, partially offset by lower Shr price, close (Jul 24, 2026) Rs618.75

credit costs, which led to a beat vs. consensus. We had expected credit costs below 52-Week Range Rs965.00-565.45

Mkt cap, curr (bn) US$6.0

consensus. Our concern has been declining PPOP margin. Avg daily trading value (mn) US$10.1

Fiscal Year Ending 03/26 03/27e 03/28e 03/29e

Stage 3 formation declined further; overall bad loan formation ticked up, owing to

EPS (Rs)** 22.77 28.11 32.03 39.82

lower reduction in Stage 2, which seems to have bottomed ( Exhibit 6 ).