Buy SBI Cards and Payment Services; target of Rs 1221: Anand Rathi

Anand Rathi's research report on SBI Cards and Payment Services

Q3 FY22 spends were buoyant on account of the festival season. The lower RBI RE book meant the pain is subsiding and the focus is on cleaning the book with accelerated write-offs. Revolvers were low but should increase subsequently. We expect profitability to register a 46% CAGR over FY22-24 despite a rise in the operating costs.

Outlook

We value the company at 38x FY24e EPS, with a revised TP of Rs1,221 (earlier Rs1,125) on higher spends, low pain visibility and better fee income. We assign a Buy (earlier Hold) rating with a 50% upside from the current price.

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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