About Company

• SBI Card was launched in 1998 by the State Bank of India and GE Capital.
• SBI cards & payments service is the only credit card company listed on the stock market.
• It is a subsidiary of India’s largest commercial bank, the State Bank of India.
• It is a non-deposit accepting systemically important non-banking financial company registered with the RBI.
• Market Share of SBI cars is 18.9% which is 2nd highest after HDFC Bank.

Stock Price

SBI Cards & Payment Services share price at IPO level

• SBI Cards launched its IPO on March 2020, at a price level of Rs. 724
• Stock made a all time high of Rs. 1165 in Oct 2021
• In last 5 years since IPO launch(2020) to May 2024, SBI Cards stock price has given only 4% returns to their investors.

• Stock price is down by 65% to a price level of Rs 708 as on May 2024, which is below than IPO listing price

Products Offered

The company offers 3 types of cards

1. Super Premium (1 card)
2. Core Cards ( 8 cards),
3. Co-Brand Cards (15 Cards in association with banks, retail and travel partners)

Revenue Mix

1) Product Wise Breakup

2) Location Wise Breakup

3) Customer Segment Breakup

Key Ratios

Shareholding Pattern

Change In Shareholding Pattern

1. Promoters:
   • Jun-21: 69.50%
   • Mar-24: 68.63%
   • Change: -0.87%
   • Analysis: There is a slight decrease in the promoters’ shareholding by 0.87%. This indicates that promoters have marginally reduced their stake in the company over this period.
2. Foreign Institutional Investors (FIIs):
   • Jun-21: 12.47%
   • Mar-24: 8.59%
   • Change: -3.88%
   • Analysis: The shareholding of FIIs has decreased by 3.88%. This significant reduction might indicate a loss of interest or confidence by foreign investors in the company or a shift of their investment to other opportunities.
3. Domestic Institutional Investors (DIIs):
   • Jun-21: 6.69%
   • Mar-24: 16.68%
   • Change: +9.99%
   • Analysis: DIIs have significantly increased their shareholding by 9.99%. This substantial increase suggests that domestic institutions have grown more confident in the company’s prospects or see it as a valuable investment.
4. Public:
   • Jun-21: 11.34%
   • Mar-24: 6.09%
   • Change: -5.25%
   • Analysis: The public shareholding has decreased by 5.25%. This indicates a reduction in the number of shares held by individual or non-institutional investors, possibly due to them selling off their shares or a buyback by the company.

Financial Trend

Revenue

• Old Value (Mar-20): 9,281 crore
• New Value (Mar-24): 16,968 crore
• Revenue increased by approximately 82.82% from March 2020 to March 2024.

Net Profit

• Old Value (Mar-20): 1,245 crore
• New Value (Mar-24): 2,408 crore
• Net Profit increased by approximately 93.37% from March 2020 to March 2024.

Company Valuation

• Current PE- 28 (Blue Line)
• Median PE- 51.2 (Red Line) (For 5 years)
• As the current PE is less than the Median PE so we can say than company is undervalued.

Stock Price Target

• For the past 5 years (2020 to 2024), stock price is within the range of 700-900 level.
• Revenue & Net Profit has almost doubled in last 5 years when it comes to the stock price , company has given only 4% returns to their investors
• So the Revenue & Net Profit got doubled in 5 years so we the stock will grow at a CAGR of 15% (assumption)
• Based on the assumption Stock price target is defined

What Should Investor Do ?

• By looking at the Current PE (28) & Median PE (51.2), company is undervalued
• Since the stock price has given only 4% returns to their investors, this stock has huge upside potential to move
• Credit Card industry in India is growing at a CAGR of 20% from (2017-2022)
• Buying at current level of Rs 708, makes sense for the long term only & there are high chances that your invested money might get doubled within 2 years.

Check Out this- HDFC bank hits 52 week low

Disclaimer

• Money Minded School is not a SEBI registered investment advisor, Please do your own research before investing
• This article is a complete guide about SBI cards & Payments Services.
• These information and forecasts are based on our analysis, research, company fundamentals and history, experiences, and various technical analyses.
• Also, We have talked in detail about the share’s future prospects and growth potential.
• Hopefully, this information will help you in your further investment.
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