Motilal Oswal's research report on SBI Cards and Payment Services
SBICARD reported a mixed quarter, with a miss in NII/PPOP, while net earnings delivered a significant beat, aided by a sharp decline in provisions. PAT grew 231% YoY to INR5.8b (MOSLE: INR4.5b). - NIM contracted by 80bp to 13.2% in 4Q (v/s 14% in 3QFY22) due to a significant (-110bp) moderation in yields as the Revolver mix fell to 25% v/s 27% in 3QFY22. Trends in spends both Retail/Corporate was healthy at 40%/102% YoY. Overall spends grew 51% YoY. - GNPA ratio moderated marginally by 18bp QoQ to 2.22%, while NNPA fell 5bp QoQ to 0.78%. RBI-RE book declined to sub-1%. RoA/RoE stood robust at 7%/30.4% in 4QFY22. - We expect the company to deliver 50% earnings CAGR over FY22-24, leading to a RoA/RoE of 7.3%/30.6%. We maintain our Buy rating.
We expect the company to deliver 50% earnings CAGR over FY22-24, leading to a RoA/RoE of 7.3%/30.6%. We maintain our Buy rating with a TP of INR1,100 per share (29x FY24E EPS).
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