Hold SBI Cards and Payment Services: target of Rs 884: ICICI Securities

ICICI Securities recommended hold rating on SBI Cards and Payment Services with a target price of Rs 884 in its research report dated April 27, 2025.

Broker Research

April 29, 2025 / 13:43 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities research report on SBI Cards and Payment Services

SBI Cards (SBIC) reported a disappointing FY25 with a 20% decline in PAT driven by higher credit cost (9%) and low NIMs (10.8%). While management commentary and execution have ratified possible peaking of both credit cost and cost of funds (CoF), the recovery trajectory remains to be monitored.

Outlook

Additionally, multiple events have proven to be challenges in the ecosystem over the last four years: 1) higher credit cost during Covid-19; 2) higher cost to income during BNPL surge; 3) structural decline in revolver mix; 4) higher CoF post-Covid-19; 5) credit cost surge in FY24; and 6) increase in risk weights by RBI. However, sound execution led to improvement in credit costs eventually in Q4FY25 and established a better outlook ahead. Retain HOLD with FY27E PAT of INR30bn (25% FY25–27E CAGR) with a higher multiple of 28x P/E vs. 25x earlier.

For all recommendations report, click here