SBI Cards Stock Price :If you are looking for a stock with strong fundamentals to invest at attractive valuations, then keep an eye on SBI Cards. Leading global brokerage houses seem bullish on SBI Cards. This share is trading at a significant discount from its 1 year high of Rs 825. At the same time, it has weakened by 5 percent in the last one year. The brokerage believes that the company’s credit cost, which peaked in Q2FY25, will remain stable in Q3FY25E and start improving in Q4FY25E. Asset quality issues will stabilize over the next 1-2 quarters, which will be positive for its return profile in FY26.
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Nuvama on SBI Cards
Brokerage house Nuvama has given ‘BUY’ rating on SBI Cards and set a target price of Rs 850. The current price of the stock is Rs 724. In this context, the stock can give returns of more than 17 percent. The brokerage says that keeping the negative aspects in mind, there is a need for an upgrade. We are upgrading the rating on SBI Cards shares from reduce due to improving credit cost outlook. Its earnings were lower than expected due to continuous increase in credit costs in the last two years and low chances of turnaround. We believe credit costs peaked in Q2FY25, will remain stable in Q3FY25E and start improving in Q4FY25E. While credit card defaults are rising for other players, we expect SBI Cards’ credit costs to improve, as its weak credit cycle started earlier than competitors, and it now has protections for better risk assessment. There are solutions.
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Nomura on SBI Cards
Brokerage house Nomura has also given ‘Buy’ rating instead of ‘Reduce’ on the shares of SBI Card and has given a target price of Rs 825 for the share. This is 14 percent more than the current price of Rs 724. SBI Cards has slowed down growth to control asset quality issues. However, the number of cards has increased in the last 2 months, which should accelerate loan growth in FY26. According to the brokerage, growth will be an important variable to track and failure in loan growth in FY26 will limit the upside potential.
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We expect loan growth of 15%/20% in FY 25/26. According to Nomura, after a shift in the credit card-debt mix towards non-metro areas (rural/semi-urban/urban) between FY17-22, the metro area’s share in credit card-debt will gradually increase from FY22 onwards. -Increasing slowly. Nomura said that as far as asset quality trends are concerned, this return to non-metro areas by lenders in the credit card segment is good news for the company. We assess that the asset quality issues for SBI Cards will stabilize over the next 1-2 quarters, which will be positive for its return profile in FY26. In November, 2024, SBI Cards added approximately 231,000 credit cards on a net basis, its highest level since December, 2023. With this, its market share in cards increased to 18.7 percent, which is the highest since January 2024.
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(Disclaimer: The advice to invest in stocks has been given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)
