SBICARD - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.1

📊 Core Financials Analysis

Profitability

ROE: 14.8% and ROCE: 10.4% — solid, reflecting efficient capital deployment and healthy margins for a credit card NBFC.

EPS: ₹19.7 — consistent earnings, though quarterly PAT dipped slightly from ₹534 Cr to ₹556 Cr.

Quarterly Profit Variation: −6.47% — minor decline, not alarming but worth monitoring.

Balance Sheet & Cash Flow

Debt-to-equity: 3.26 — high, typical for lending businesses; manageable due to strong interest income and low delinquency rates.

Dividend Yield: 0.28% — modest, consistent with a growth-oriented strategy.

Cash flows are stable, backed by a growing card base and strong fee income.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 45.2 Richly valued vs industry PE of 24.0

P/B Ratio ~6.15 Elevated, but supported by strong ROE

PEG Ratio 7.76 Overvalued relative to growth

Intrinsic Value ₹1,248 (est.) Current price undervalued by ~28%

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🧠 Business Model & Competitive Edge

Company Profile: SBI Cards & Payment Services Ltd is India’s second-largest credit card issuer, offering a wide range of cards across retail, corporate, and co-branded segments.

Strengths

Strong parentage (SBI) and access to a vast customer base.

Diversified revenue streams: interest income, fees, and merchant services.

High operating leverage and brand trust.

Challenges

Elevated valuation multiples and high PEG ratio.

Sensitive to interest rate cycles and credit risk.

Institutional sentiment is mildly positive — FII and DII holdings both increased.

📈 Technical & Sentiment Overview

RSI: 69.8 — nearing overbought zone, short-term caution advised.

MACD: 15.9 — bullish momentum, trend continuation likely.

DMA 50 & 200: Price above both — confirms uptrend.

Volume: Slightly above average — steady investor interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹850–₹880 — near DMA 50 and below intrinsic value.

Holding Strategy

Ideal for long-term investors seeking exposure to India’s consumer credit boom.

Price targets for FY27 range from ₹1,200 to ₹1,450; long-term targets for FY30 could reach ₹2,000+.

Monitor card activation rates, NPA trends, and regulatory changes in digital payments.

SBICARD is a high-quality financial play with strong fundamentals and brand strength. If you're building a portfolio focused on consumer finance and digital payments, this one deserves a core allocation. You can explore valuation breakdowns on AlphaSpread’s SBICARD dashboard

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