SBICARD - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.2

Let’s unpack SBI Cards and Payment Services (SBICARD) — India’s second-largest credit card issuer operating in a high-growth yet cyclically sensitive financial segment 💳📊

📘 Core Financial Overview

Profitability

PAT for the quarter: ₹556 Cr. vs ₹534 Cr. — modest sequential growth, but YoY profit variation of -6.47%, hinting at margin compression.

EPS: ₹19.7 — reasonable, though not stellar for current price point.

ROE: 14.8%, ROCE: 10.4% — fair return metrics, though below top-tier NBFC benchmarks.

Balance Sheet Check

Debt-to-Equity: 3.26 — expectedly high for a credit issuer, though risk needs balancing via quality receivables.

Dividend yield: 0.31%, a token payout showing capital retention strategy.

💸 Valuation Breakdown

Indicator Value Insight

P/E Ratio 40.7 Premium vs. industry PE of 24.5

P/B Ratio ~5.54 Elevated — pricing in growth & quality of book

PEG Ratio 6.98 Overvaluation relative to earnings growth

Intrinsic Value ~₹700–₹750 Currently trading near intrinsic ceiling

🟥 Market likely pricing in future consumer credit growth and digital payment tailwinds. Current valuation stretched for recent earnings trajectory.

💼 Business Model & Edge

Pure-play credit card and digital finance provider with strong brand via SBI linkage.

Growth leverages rising consumer credit penetration, digitization, and retail appetite.

Institutional flows positive: FII (+0.35%), DII (+0.28%) — suggests growing confidence post price correction.

Challenges include regulatory oversight, competition from BNPL and fintech, and delinquency cycles.

📉 Technical Position & Entry Zone

RSI: 22.6 — oversold territory; potential reversal signal.

MACD: -31.7 — deep bearish momentum.

Price well below DMA 50 (₹900) and DMA 200 (₹849) — signifies short-term weakness.

🎯 Suggested Entry Zone

Value accumulation: ₹740–₹780

Aggressive buyers may eye ₹700–₹720 for deeper margin of safety

⏳ Long-Term Outlook

✅ Macro tailwinds (cashless economy, consumer spend), solid backing, low NPAs historically

⚠️ Rich valuation + moderate ROE/ROCE + cyclical risks

🟡 Fit for portfolios seeking financial sector exposure, but prudent to watch delinquency trends and regulatory updates

Need a head-to-head with Bajaj Finance, HDFC Bank, or fintech disruptors like Paytm? I can sketch a matrix to compare earnings power, growth trajectories, and valuations 🔍📈

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