SBI CARD AND PAYMENT SERVICES Ltd.                                                                             
LARGE-CAP
SECTOR: FINANCIAL SERVICES
INDUSTRY: CREDIT CARDS AND PAYMENT SOLUTIONS

DATE: 20/07/2024

ALL NUMBERS AND INFORMATION WHEN REPORT MADE

Company Overview

SBI Cards is the only pure credit card listed company. The company is a leading credit card issuer in India, offering a wide range of credit card products and services. As a subsidiary of the State Bank of India (SBI), it benefits from the extensive customer base of India's largest commercial bank.

Financials

• Revenue: Consistent revenue with a 19% 5-year compounded growth, driven by increased card issuance and higher spending per card.
• Profitability: Consistent profit growth with 22% 5-year CAGR.
• Valuation: SBI Card is the only pure credit card listed company. But compared to other financial companies the PE ratio is medium at 31.
• Debt: As a finance player SBI Cards maintains a healthy debt-to-equity ratio of 3.3, indicating a strong financial position.

Strengths

• Market Leadership: The Indian credit card market is growing at 15% CAGR. SBI Cards is the second-largest credit card issuer in India with a significant market share.
• Strong Parent Company: Association with SBI provides a strong brand and customer base.
• Product Diversification: Offers a diverse range of credit cards to cater to different customer segments.
• Digital Innovation: Focus on digital platforms and technology to enhance customer experience.

Weaknesses

• Competition: Intense competition from other credit card issuers and digital payment platforms.
• Regulatory Risks: Changes in regulations or economic conditions could impact the credit card industry.
• Credit Risk: Exposure to credit risk from cardholders could affect profitability.

Opportunities

• Growing Consumer Base: Expanding credit card penetration in India presents significant growth opportunities.
• Digital Payments: Increasing adoption of digital payments can drive demand for credit cards.
• Product Innovation: Introducing innovative credit card products and services to stay competitive.

Threats

• Economic Downturn: A slowdown could impact consumer spending and credit card usage.
• Regulatory Changes: Changes in regulations related to credit cards or interest rates could affect profitability.
• Competition from Digital Wallets: The growing popularity of digital wallets could reduce demand for credit cards.

Overall Assessment

SBI Cards has demonstrated strong financial performance and growth potential. Its association with SBI, market leadership, and focus on digital innovation are key strengths. However, investors should consider the potential risks associated with the credit card industry and the competitive landscape.

Key Points

Revenue: 10.8% YoY

Net Profit: 0.2% YoY

Quarterly EPS: 6.3 Vs 6.3 YoY

Quarterly OPM: 34.22% Vs 32.75% YoY

KEY RATIOS

SHAREHOLDING:

PROMOTOR: 68.62%
FII                : 8.72%
DII               : 16.54%
PUBLIC      : 6.11%

Technical:

On the technical chart of SBICARD gives a descending triangle breakout after 10 months of the base formation near the support on the weekly chart. Weekly RSI trading above 60 and Monthly RSI above 50 shows strength and accumulation. The volume is good on the weekly breakout candle. The stock is trading near 52 week's high 858 and we can assume it will keep that momentum.

DISCLAIMER: Stock market investment/trading is subject to market risk. This report has been prepared by THE MONEY MINT the marketing name of the individual SEBI (Research Analyst) (Registration No. INH000014456) and is solely for information of the recipient only. The report must not be used as a singular basis for any investment decision. The views herein are general and do not consider the risk appetite or the particular circumstances of an individual investor; readers are requested to take professional advice before investing. Nothing in this document should be construed as investment advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in securities of the companies referred to in this document and should consult their advisors to determine the merits and risks of such investment. The information and opinions contained herein have been compiled or arrived at, based upon information obtained in good faith from publicly available sources. Such information has not been independently verified and no guarantee, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change according to market scenarios. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete. THE MONEY MINT or associates are not obliged to update this report for such changes. THE MONEY MINT or the associates are not responsible for profit or loss.

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