SBI Cards surprises with Q4 profit growth amid strong retail spending

New Delhi: SBI Card Q4 Earnings: SBI Cards and Payment Services on Friday reported an unexpected 11 per cent rise in fourth quarter profit, boosted by higher retail spending, which offset the increase in bad loans.

The company’s profit after tax rose to Rs 662 crore in the January-March period from Rs 596 crore a year ago. Analysts had expected a profit of Rs 561 crore, according to LSEG data.

Strong credit demand, particularly in unsecured categories such as credit cards, driven by strong retail consumer spending, has contributed to the company’s performance. However, India’s central bank has responded by increasing capital requirements for such loans.

During the period, spending by cardholders grew 11 per cent year-on-year to Rs 79,653 crore, with interest income rising nearly 28 per cent to Rs 2,139 crore.

Despite growth in retail spending, SBI Cards saw its earnings hit due to a slowdown in corporate spending. The company also experienced a decline in market share in industry spending in the last two months of the quarter, due to lower corporate spending and fewer new card issuances amid rising bad loans. Gross write-offs for SBI cards rose 60 per cent to Rs 864 crore, while net interest margin (NIM) declined 60 basis points year-on-year to 10.9 per cent.

Defaults in the personal loan segment are increasing, mainly due to abundant lending in unsafe areas. Gross bad loans as a percentage of gross advances for SBI cards increased to 2.76 per cent at the end of March, compared to 2.64 per cent at the end of December. Ahead of the results, the company’s shares closed down 1 percent.

Microsoft ‌CEO Highlights Gaming Achievements

Satya Nadella,⁢ the CEO​ of Microsoft, emphasized ⁣the company’s significant strides in the gaming​ industry. He​ mentioned that Microsoft offers a wide array of AI accelerators, including cutting-edge ⁤technologies from ⁤Nvidia, Advanced Micro Devices, and its proprietary silicon.

Nadella stated, “Over half of our ​Azure AI customers​ also utilize our data and analytics tools. Customers are developing intelligent applications on Azure, PostgreSQL, and Cosmos ‌DB with seamless integrations with ‌Azure AI.”

Microsoft recently finalized its acquisition of Activision Blizzard for $68.7 million in October. Nadella expressed ⁣the company’s dedication to expanding the reach ​of great games to a broader audience across various ​devices.

He added,‍ “We achieved record-breaking game-streaming hours, console usage, and‍ monthly active devices in​ the third quarter.”

Following the earnings report, analysts adjusted⁢ their​ price targets for⁢ Microsoft shares to reflect the company’s performance.

TheStreet Pro’s Chris Versace commented, “With AI adoption driving⁣ cloud usage and​ the potential for Integrated Cloud margins to remain high, Microsoft’s profitability is expected ⁢to continue ⁢growing.”

Analysts‌ Optimistic about Microsoft’s Future

Bank⁢ of ⁢America Securities reiterated their buy rating and $480 price target for Microsoft, ⁣highlighting the positive impact of​ cloud and artificial intelligence ⁢on the ⁢company’s success.

The ⁢investment firm emphasized Microsoft’s leadership ‌in AI and cloud technologies, ⁢predicting continued revenue⁤ growth driven by Azure AI services.

Macquarie analyst Frederick Havemeyer raised‍ the price target to $460, praising Microsoft’s strong performance and the growth potential in the gaming segment following the Activision Blizzard acquisition.

Piper Sandler also raised​ their price target to $465, citing​ the accelerated revenue growth of Azure and the company’s commitment to⁢ maintaining a high operating margin.

Wells Fargo showed confidence in Microsoft’s future by increasing the price target to $500,‍ highlighting the impressive‌ results, strong demand for AI, and the company’s outlook for double-digit revenue and⁢ operating profit growth.