SBI Cards and Payment Services Ltd. share price target

tweak the valuation multiple to 43x P/E (earlier 44.5x) arriving at price target of Rs 1,081 (earlier Rs895). Reiterate ACCUMULATE RATING on the stock. than industry averages on cards-in-force and spends traction. (a) SBICARD records 16%YoY/1.4%MoM card-in-force growth, second best to ICICIB and better than HDFCB. (b) On card spends, SBICARD registers 1.5%YoY/32.7%MoM growth, second best to HDFCB. Moreover, the Co. has maintained MoM market share in terms of outstanding cards at 19% for Oct'20. We expect 17% CAGR in outstanding cards traction over FY21-23 with the...

Net interest income rose 20.0% YoY in Q2FY21, aided by NIM expansion (+185bps YoY) with higher interest income yield (+56bps YoY) and lower cost of funds (-96bps). Non-interest income was up 1.9% YoY. Pre-provision profit grew 37.1% YoY, further helped by lower opex (9.5% YoY). However, PAT fell 45.9%, impacted by higher provisioning. Overall cost to income ratio improved to 49.3% (-10.3bps YoY). Company added 688k new accounts during the quarter. Cards in force...

our conservative stance on credit costs (12%) and NPA (~8%) for FY21 led by pandemic challenges. While we assess 10% of book net of provisions stands under stress as at Sep'20-end, provision run-rate to stay elevated for H2FY21 (avg. Rs8bn). Said that, Q2FY21 witnessed outstanding cards traction (~4% QoQ growth vs negative in Q1FY21) and improved spends (55% QoQ growth) buoyed by retail spends (90% pre-COIVD levels). Such a business rebound coupled with healthy PPoP (13%QoQ/27%YoY) should absorb asset quality...

We revise our rating to HOLD from BUY and revise the target price to Rs 925 (35x FY23E EPS).

We value SBIC at 35x FY23E EPS basis given the long runway for sustainable growth on the back of industry tailwinds, strong parentage, robust business model and effective credit underwriting and collection mechanism. We initiate coverage with a 'BUY' rating with a target price of Rs. 1010

on non-discretionary (88-90% of spends led by both retail & corporate) and digital spends (online retail spends rose to 56% in Q1FY21 from 44% in FY20) translated into healthy loans (Rs 233bn vs PLe of Rs 217bn growing 10%YoY/3%QoQ) and avg daily spends (up 77% to pre-COVID levels) defying lockdown challenges. While NPA (down 133bps YoY/33bps QoQ to 1.35%) and provisioning (42% down QoQ) for the quarter witnessed sharp decline, the same stands masked due to moratorium dispensation. Hence, we build-in...

such challenges, Co has been focusing on new spend categories (education, online health & pharmacies) and utility spends (D&G;, fuel, electronic, wellness). Moreover, continued interest income and repayments from morat customers (24% at Apr-end) could act as cushions. We expect moderation in per card spends (0.5-1% vs ~6% pre-COVID era) and card additions (2% in H1FY21 vs avg 27% pre-COVID era) in H1FY21. While near term challenges stand imminent, sufficient capital, liquidity buffers and robust risk management would support balance sheet resilience. We have built-in...

to Co.'s SBI association, existing sophisticated technology infrastructure and data analytics. Valuation multiple stands trimmed as it reflects the vulnerability of unsecured nature of business to pandemic shocks. At CMP, stock trades at 42x FY20 & 32x FY22E P/E. While a credit card business remains a high growth high return model and SBICARD FY22 earnings expected to report robust 27% RoE and 5% RoA, our revised multiple at 36x (earlier 38x) stands justified. Maintain BUY with TP of Rs 643 (earlier Rs 646). Spends under pressure; retail share focus: Spends per day declined 32% in 2nd...

SBI Cards & Payment Services (SBI Cards) is the leading issuer of credit cards in India. Incorporated in October 1998 as a joint venture between State bank of India and GE Capital. Later in December 2017 State Bank of India and Carlyle Group acquired GE Capital's stake in the company. Company offers Indian consumers access to a wide range of world-class, value added payment products...

Incorporated in October 1998, SBI Cards started its operations as JV between SBI and GE Capital however GE Capital sold its stake to Caryle Group & SBI in 2017. In April 2018, SBI Business Process and Management Services, a company providing backend payments and processing services to SBI Cards was merged with company and name was changed to SBI Cards and Payment Services Ltd in August 2019. It is the second-largest credit card issuer in India, with a 17.1% and 17.9% market share of the Indian credit card market in terms of total credit card spends in fiscal 2019 and in the six months ended September 30, 2019 respectively. The revenue model generates both non-interest income as well as interest income...