SBI Card Share Price Target Forecast 2022, 2023, 2025, 2030

10 January, 2022

HDFC Securities recommends buying SBI Cards and Payment Services with a target price of Rs 1100.

SBI Cards and Payment Services Ltd. got a buy call from HDFC Securities with a target price of Rs 1100. SBI Cards and Payment Services are now priced at Rs 904 in the market. SBI Cards and Payment Services Ltd. pricing can achieve set objective in one year, according to analyst.

SBI Cards and Payment Services Ltd., founded in 1998, is a Small Valuation business in the Financial Services industry with a market cap of Rs 87244.17 crore.

Interest, Fees & Other Charges, Other Services, Service Charges, Commission, and Income From Sale Of Shares & Securities are the primary products/revenue segments for SBI Cards and Payment Services Ltd. for the year ending 31-Mar-2021.

Financials

The firm reported a Standalone Total Income of Rs 2695.46 Crore for the quarter ended September 30, 2021, up 9.98 percent from the previous quarter’s Total Income of Rs 2450.94 Crore and up 7.27 percent from the same quarter last year’s Total Income of Rs 2512.73 Crore. In the most recent quarter, the company generated a net profit after tax of Rs 344.90 crore.

Reasons for Investing

SBI Cards has diversified its revenue sources (fee income at 50 percent of total income) to boost profitability, which are positioned for a 45 percent EPS CAGR during FY21-FY24E, thanks to a balanced client acquisition approach across open market and banca (SBI). Credit cards are a very profitable industry internationally, but they are significantly underpenetrated in India (0.04x CC per capita) and hence have a lengthy development runway ahead of them. Apart than providing a 100bps financing cost advantage, SBI’s parentage also provides access to India’s largest customer base (just 4% of SBI’s prospective consumers are carded). While SBI Cards is vulnerable to some of the longer-term category disruption risks posed by UPI, BNPL, and future swipe charge regulations, the brokerage believes that these will not only unfold gradually but also provide significant profit set-offs.

FII Holdings/Promoter

As of September 30, 2021, promoters owned 69.37 percent of the firm, while FIIs owned 13.07 percent and DIIs 9.7 percent.

economictimes.com is the source for this information.


13 DECEMBER 2021

Motilal Oswal recommends buying SBI Cards and Payment Services with a target price of Rs 1300.

In a research note dated December 12, 2021, Motilal Oswal suggested a buy rating on SBI Cards and Payment Services with a target price of Rs 1300.

SBI Cards and Payment Services research report by Motilal Oswal

In the next month, the RBI plans to release a discussion paper (link to RBI statement) that would address costs associated with different digital payment modalities, including as credit cards, debit cards, PPIs, and UPIs. This is done in order to make digital transactions both inexpensive for users and profitable for providers. SBICARD has dropped 9% in the last two days due to worries of a cut in MDR charges, which might hurt profitability.

The spend-based charge at SBICARD accounts for 45-54 percent of overall fees and 18-23 percent of total income. We predict an 8-17 percent profits impact if MDR on credit cards is decreased by 10-20 percent, based on our sensitivity analysis. The profits harm might be mitigated by 5-12 percent if the firm reduces payment processing charges, the cost of reward points, and the interest-free payment term for clients.

The RoA/RoE damage would be limited to 21-37bp/87-155bp. After a 9% drop in price, the company is currently trading at 23 times FY24E earnings, which looks to be a good deal. Any reduction in MDR charges will have a significant impact on earnings, thus we’ll be on the lookout in the near future.

Outlook

After COIVD-19 interrupted the growth trajectory, SBICARD claimed a good comeback in card acquisition and retail expenditures. Over FY21-24E, we expect a 30 percent / 56 percent CAGR in loan book/earnings, driven by strong spending growth, improved asset quality, and increased operational leverage.

Moneycontrol.com is the source for this information.


9 December, 2021

Should you buy, sell, or retain SBI Cards after it fell over 5%?

The stock of SBI Cards and Payment Services Ltd reversed dramatically on Thursday after falling more than 5%. This is only the second time in December that the share price of SBI Cards has fallen. Earlier in the day on December 6, the stock fell about 2% throughout the session and closed the day roughly 1% down.

SBI Cards’ stock has dropped more than 3% in the previous five days. Those who have invested in the stock so far in 2021 (year-to-date) have got a return of over 13%.

While there appears to be no specific cause for the stock’s decline on Thursday, it comes only days after a storey on the news website The Ken said that the business is looking to enter the premium credit card market.

Exclusive benefits and rewards are included with premium credit cards. They do, however, have tougher qualifying requirements, such as a good credit score, a high income level, the kind of employment, the classification, work stability, and so on.

According to The Ken report, both Citibank and Amex are going to abandon the credit card sector due to a regulatory embargo, a large portion of the premium credit card market is up for grabs. It goes on to say that it’s a profitable potential for banks like SBI and HDFC, but how effectively they modernise their internal playbooks will determine if they can seize it.

Meanwhile, starting this month, the State Bank of India would charge its credit card clients a fee of Rs 99 plus taxes on all EMI transactions. When paying using SBI credit cards, a processing fee will be imposed at merchant outlets, e-commerce websites, and applications.

CNBCTV18.com is the source of this information.


08 NOVEMBER, 2021

SBI Card would issue bonds to generate Rs 2,000 crore.

SBI Cards and Payment Services (SBI Card) said on Monday that it will fund Rs 2,000 crore through a private placement bond offering.

“The company’s board of directors has authorised the issue of non-convertible debentures (NCDs) in the amount of Rs 2,000 crore,” SBI Card stated in a regulatory statement.

The funds will be raised in one or more tranches, with the issue taking place through a private placement, according to the statement.

On the BSE, the company’s stock was trading at Rs 1,104, down 1.45% from its previous close.

Moneycontrol.com is the source for this information.


29 October, 2021

SBI Cards and Payment Services’ PAT jumps 67 percent to Rs 345 crore in the second quarter of FY22.

SBI Cards and Payment Services’ consolidated net profit increased 67.30 percent to Rs 344.90 crore in Q2 FY22 over Q2 FY21, owing to a 6.67 percent increase in total revenue from operations to Rs 2,576.24 crore in Q2 FY22 over Q2 FY21.

Finance costs fell by Rs 10 crore, or 4%, to Rs 254 crore in Q2 FY22, compared to Rs 264 crore in Q2 FY21. Due to increasing business volumes in Q2 FY22, overall operating costs increased by Rs 277 crore, or 25%, to Rs 1,383 crore in Q2 FY22 from Rs 1,106 crore in Q2 FY21.

Earnings before credit costs were Rs 1,058 crore in Q2 FY22, down 7.19 percent year on year from Rs 1,140 crore in Q2 FY21. As of September 2021, the total management overlay provision was Rs 231 crore. Impairment losses and bad debts charges for Q2 FY22 were Rs 594 crore, down 31.09 percent year over year from Rs 862 crore in Q2 FY21.

In Q2 FY22, the number of new accounts reached 9,53,000, up 39 percent from 6,88,000 in Q2 FY21. Card-in-force increased by 14% to 1.26 crore in Q2 FY22, compared to 1.10 crore in Q2 FY21. In Q2 FY22, retail spending increased by 41% to Rs 35,070 crore, up from Rs 24,863 crore in Q2 FY21. Corporate spending increased by 80% in Q2 FY22 to Rs 8,491 crore, up from Rs 4,728 crore in Q2 FY21. Receivables increased by 12% to Rs 26,741 crore in Q2 FY22, compared to Rs 23,978 crore in Q2 FY21.

On September 30, 2021, gross non-performing assets (GNPA) were 3.36 percent of gross loans, compared to 7.46 percent on September 30, 2020. On 30 September 2020, net non-performing assets (NNPA) were at 0.91 percent, down from 2.70 percent.

SBI Cards and Payment Services’ stock dropped 3.81 percent to Rs 1,081.65 on the BSE. SBI Card is a non-banking financial institution that provides a diverse credit card portfolio to both individual and business customers.

Business-standard.com is the source for this information.


27 JULY 2021

Motilal Oswal recommends buying SBI Cards and Payment Services with a target price of Rs 1200.

In a research note dated July 24, 2021, Motilal Oswal suggested a buy rating on SBI Cards and Payment Services with a target price of Rs 1200.

SBI Cards and Payment Services research report by Motilal Oswal

SBICARD announced a stable 1QFY22, with a strong beat in earnings, aided by fewer provisions, and consistent operating performance. Overall spends/receivables decreased sequentially due to the lockdown in April-May of this year, but began to rebound in June of that year. Margin also increased by 160 basis points, owing to a better loan mix, while fee revenue remained relatively unchanged QoQ. The RBI RE book fell to INR13.8 billion (6 percent of loans vs. 8 percent in 4QFY21), although asset quality ratios improved significantly, owing to larger write-offs.

It has offered an additional 65 percent /100 percent on overdue RBI RE books that are 30-90/90 days old. This, together with a high PCR (78 percent) and INR2.58 billion in management overlay reserves, should keep credit costs in check. We raise our FY22E/FY23E predictions by 11% and 19%, respectively. We keep our Buy recommendation.

Outlook

In FY23E, we expect RoA/RoE to improve to 7.9%/30.5 percent. Our Buy recommendation remains intact, with a TP of INR1,200/share (41x FY23E EPS).

Moneycontrol.com is the source for this information.


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