How has been the historical performance of SBI Cards?

Revenue and Profit Growth

Over the seven-year period ending March 2025, SBI Cards’ net sales have surged from ₹6,999 crore in 2019 to ₹18,072 crore in 2025, representing a compound annual growth rate (CAGR) of approximately 19%. This steady increase underscores the company’s successful expansion in the credit card market and growing customer base. Total operating income mirrored this trend, as other operating income remained nil throughout the period.

Operating profit before depreciation and interest (PBDIT) excluding other income rose from ₹1,103 crore in 2019 to ₹2,163 crore in 2025, although it peaked at ₹2,913 crore in 2024 before moderating. Including other income, operating profit reached ₹2,728 crore in 2025, down from a high of ₹3,429 crore in 2024. This indicates some volatility in ancillary income streams.

Profit after tax (PAT) exhibited a similar pattern, climbing from ₹865 crore in 2019 to ₹1,916 crore in 2025, with a peak of ₹2,408 crore in 2024. Earnings per share (EPS) followed suit, increasing from ₹10.33 in 2019 to ₹20.14 in 2025, reflecting enhanced shareholder value despite a slight dip from the previous year’s ₹25.32.

Margins and Expense Analysis

The operating profit margin excluding other income has shown some fluctuation, peaking at 18.8% in 2023 before declining to 12.0% in 2025. Gross profit margin turned negative in 2025 at -2.5%, a notable decline from positive margins in prior years, largely due to rising interest expenses which increased from ₹1,009 crore in 2019 to ₹3,178 crore in 2025. This surge in interest cost has pressured gross profitability, resulting in a negative gross profit in the latest fiscal year.

Employee costs have risen steadily, reaching ₹590 crore in 2025, while manufacturing expenses showed a sharp increase in 2024 before moderating. Other expenses have also escalated significantly, from ₹5,518 crore in 2019 to ₹14,687 crore in 2025, reflecting the company’s expanding operational scale and associated costs.

Balance Sheet and Financial Position

SBI Cards’ total assets have grown substantially from ₹25,032 crore in 2020 to ₹65,103 crore in 2025, driven by increases in both non-current and current assets. Shareholders’ funds have more than doubled from ₹5,341 crore in 2020 to ₹13,782 crore in 2025, supported by rising reserves. The book value per share has improved from ₹56.88 in 2020 to ₹144.86 in 2025, indicating enhanced net asset value per share.

The company’s debt profile shows a marked increase in short-term borrowings, which rose from ₹17,573 crore in 2020 to ₹44,947 crore in 2025. Long-term borrowings remain nil, suggesting reliance on short-term funding. Total liabilities have nearly tripled over five years, reflecting the company’s aggressive growth strategy financed through borrowings.

Cash Flow Trends

Cash flow from operating activities has been negative in recent years, with ₹-2,140 crore in 2025 and deeper negative figures in prior years, indicating working capital pressures and investment in business growth. Investing activities consistently show cash outflows, reflecting ongoing capital expenditure and asset development. Financing activities have provided positive cash inflows, with ₹4,686 crore raised in 2025, supporting the company’s liquidity and expansion needs.

Despite operational cash flow challenges, the company has maintained a stable cash and bank balance, closing at ₹2,537 crore in 2025, up from ₹515 crore in 2020, aided by financing inflows and prudent cash management.

Summary and Outlook

In summary, SBI Cards has exhibited strong top-line growth and improved profitability over the past several years, supported by expanding market share and operational scale. However, rising interest expenses and other costs have compressed margins recently, and cash flow from operations remains a challenge due to working capital demands. The company’s balance sheet reflects increased leverage through short-term borrowings, which warrants close monitoring.

Investors should weigh the company’s growth potential against margin pressures and funding risks. The steady increase in earnings per share and book value per share signals value creation, but the negative gross profit margin in the latest year highlights the need for cautious analysis of cost management and interest burden going forward.

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