Accumulate SBI Cards and Payment Services; target of Rs 1162: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on SBI Cards and Payment Services

SBICARD’s Q3FY22 earnings (PAT at Rs 3.8bn up 12%QoQ/84%YoY but below ests) exhibited mixed earnings show as seasonality played out on business and costs metrics. While receivables at Rs291bn (PLe: Rs278bn) grew healthy 13%YoY/9.0%QoQ and stood marginally higher than our estimates (PLe: Rs278bn), opex increased 24%QoQ/28%YoY due to festive season with cost-income trending as high as 60%. Yields stood under tad pressure as higher yielding revolver mix stood stagnant at 27% of overall receivables. While GNPAs stood lower at 2.4% vs 3.4% in Q2FY22 led by aggressive write-offs, credit costs at 9% continues to remain elevated despite earlier guidance of declining trends. Corporate spends traction continues to stay robust clocking 53%QoQ growth aiding fees/others (15%QoQ/31%YoY).

Outlook

We maintain Accumulate rating on the stock as SBICARD maintains high return profile (6.5%+RoA/ 26%RoE) with 32% EPS CAGR over FY22-24. Our valuation multiple at 42x PE Sep’23E results into price target of Rs1,162 and that remains unchanged.

More Info

At 17:30 SBI Cards & Payment Services was quoting at Rs 843.40, down Rs 6.85, or 0.81 percent.

It has touched an intraday high of Rs 850.00 and an intraday low of Rs 826.90.

It was trading with volumes of 140,537 shares, compared to its thirty day average of 122,127 shares, an increase of 15.07 percent.

In the previous trading session, the share closed up 4.44 percent or Rs 36.15 at Rs 850.25.

The share touched its 52-week high Rs 1,164.65 and 52-week low Rs 781.25 on 01 September, 2021 and 25 January, 2022, respectively.

Currently, it is trading 27.74 percent below its 52-week high and 7.72 percent above its 52-week low.

Market capitalisation stands at Rs 79,542.15 crore.
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