Neutral SBI Cards; target of Rs 770: Motilal Oswal

Motilal Oswal recommended Neutral rating on SBI Cards with a target price of Rs 770 in its research report dated July 28, 2024.

Broker Research

July 30, 2024 / 12:47 IST

Neutral

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on SBI Cards

SBI Cards (SBICARD)’s PAT was 8% below estimate at INR5.9b due to lower revenue from operations and higher provisions. NII inched up 4.4% QoQ. Margin was broadly stable at 10.9%. The share of revolver mix was stable at 24%, while EMI mix inched up to 38% (vs. 37% in 4QFY24). Spending growth decelerated 3% QoQ amid a sharp 49.8% QoQ decline in corporate spending. Retail spending, however, grew 23% YoY/3.9% QoQ. sset quality remained under pressure with GNPA/NNPA ratios increasing 30bp/12bp QoQ to 3.06%/1.11%. The drop in corporate spending led to a decline in overall opex, and as a result, RoA/RoE stood at 4.1%/19.1%.
We further cut our FY25E/FY26E EPS by 8.3%/9.5%, factoring in an elevated credit cost and subdued margins and revenue growth. Reiterate Neutral with a TP of INR770 (premised on 20x FY26E EPS).

Outlook

We further cut our FY25E/FY26E EPS sharply by 8.3%/9.5%, factoring in elevated credit cost and subdued margin and revenue growth. Reiterate Neutral with a TP of INR770 (premised on 20x FY26E EPS).

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