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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 July 28, 2025.

July 29, 2025 / 15:13 IST
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ICICI Securities's research report on SBI Cards and Payment Services

SBI Cards (SBIC)’s Q1FY26 results remained modest with 60bps higher credit cost QoQ and lower receivables growth guidance of ~10–12% vs. 12–14% earlier. We maintain that only directionally better credit cost may not suffice given the business environment’s tough history; any exuberance should be tempered with the experience of lingering challenges faced in the last four years, viz.: 1) higher credit cost during Covid-19 and its escalation in FY24; 2) higher cost to income during the BNPL surge; 3) structural decline in revolver mix; 4) higher CoF post-Covid-19; 5) increase in risk weights; and 6) now, a resurgence of the credit cost cycle in FY26.

Outlook

Maintain HOLD; INR 884 TP unchanged We expect PAT of INR 24bn/INR 30bn for FY26E/FY27E. This results in RoAA of ~3.5%/3.8% for FY26E/FY27E and RoAE of ~16.1%/17.4% in FY26E/FY27E. RoAA/RoAE stood at 3.4%/15.8% in Q1FY26 and 3.1%/14.8% in FY25.

For all recommendations report, click here

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SBI Cards and Payment Services_28072025_ICICI Securities

Broker Research
first published: Jul 29, 2025 03:13 pm

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