Buy SBI Cards and Payment Services; target of Rs 1000: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on SBI Cards and Payment Services

SBICARD reported a muted 2QFY23, with net earnings dragged by higher provisions, even though PPOP growth stood in line. PAT grew 52% YoY to INR5.3b (11% miss). Margin fell 90b QoQ to 12.3% in 2Q on the back of a decline in the revolver mix (24% v/s 26% in 1QFY23) and higher cost of funds. Trends in Retail spends were strong at 45% YoY, while Corporate spends witnessed a slight moderation (34%). Overall spends rose 43% YoY. GNPA ratio improved by 10bp QoQ to 2.14%, while NNPA ratio was stable at 0.78%. PCR moderated to ~64%. RoA/RoE stood at 5.4%/24.1%.

Outlook

We estimate SBICARD to deliver 41% earnings CAGR over FY22-24, leading to a RoA/RoE of 6.5%/28.2%. We maintain our Buy rating with a TP of INR1,000.

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SBI Cards and Payment Services - 28-10-2022 - moti