SBI Card Share Plunges 5% Post Q3 Results: Buy, Sell, or Hold?

SBI Cards and Payment Services reports an 8% rise in Q3 net profit, reaching ₹549 crore, marking a solid increase from last year's ₹509 crore.

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Despite positive profit growth, SBI Card's share price experienced a significant drop, plunging over 5% early Monday following the Q3 announcement.

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The company's total income saw a remarkable 30% year-on-year surge in Q3FY24, climbing to ₹4,742 crore from the previous year’s ₹3,656 crore.

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Q3 results missed market expectations, with a 7% consensus miss attributed to a sharp rise in credit costs and unexpected operational expenditures.

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CEO highlights a 16% quarter-on-quarter increase in delinquencies, indicating a challenging period ahead with high credit costs and a weak outlook.

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Nuvama Institutional Equities anticipates a persistent rise in credit costs and projects a weak financial outlook for SBI Cards, despite its market presence.

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The company faces asset quality challenges, with Gross and Net NPA ratios showing worrying increases to 2.64% and 0.96%, respectively.

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Motilal Oswal Financial Services describes the quarter as underwhelming, citing high provisions and a pressure on margins due to rising funding costs.

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SBI Card's stock struggles in early trade at ₹720.95, reflecting investor concerns over the company's recent performance and future outlook.

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