SBICARD - Investment Analysis

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

Investment Rating: 3.1

📊 Fundamental Analysis

Strengths

Consistent Profitability: PAT remains strong at ₹556 Cr, with only a minor dip from ₹534 Cr.

ROE of 14.8%: Decent return on equity for a financial services firm.

Institutional Confidence: FII (+0.35%) and DII (+0.28%) holdings have increased.

EPS of ₹19.7: Solid earnings base for a mid-to-large cap financial player.

Brand Backing: Strong parentage via SBI adds credibility and customer trust.

Concerns

High P/E (40.7) vs Industry (24.5): Valuation is stretched.

Very High PEG Ratio (6.98): Indicates earnings growth is not keeping pace with valuation.

Low ROCE (10.4%): Weak capital efficiency.

Low Dividend Yield (0.31%): Not attractive for income-focused investors.

Technical Weakness

RSI at 22.6: Deeply oversold — could signal short-term bounce, but trend is weak.

MACD negative (−31.7): Bearish momentum.

Price below both 50 DMA (₹900) and 200 DMA (₹849): Downtrend confirmed.

Debt-to-Equity (3.26): High leverage typical of NBFCs, but still a risk factor.

💡 Is It a Good Long-Term Investment?

Cautiously yes — but not at current levels. SBICARD has strong brand equity and consistent profitability, but its valuation is too high relative to growth. It’s best approached as a long-term play only if entered at a more reasonable price.

🎯 Ideal Entry Price Zone

Fair Value Zone: ₹720–₹760 Offers a better margin of safety and aligns with recent support levels.

Aggressive Entry: ₹660–₹700 Near 52-week low — suitable for contrarian investors betting on a rebound.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: 2–3 years with close monitoring of valuation and earnings growth.

Exit Strategy

Partial Exit near ₹950–₹1,000 if valuation remains high and growth slows.

Full Exit if PEG stays above 6.0 and ROE drops below 12%.

Re-evaluate if RSI crosses 70 or MACD turns positive — could signal short-term rally.

Would you like a comparison with other NBFCs or fintech players like Bajaj Finance or Paytm to assess relative growth and valuation dynamics?

Edit in a page