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

Market Cap	₹ 67,433 Cr.
Current Price	₹ 709
High/Low	₹ 933 / 679
Stock PE	28
Industry PE	20.3
ROCE	12.5 %
ROE	22.0 %
PEG Ratio	1.23
Debt To Equity	3.30

Shareholding Pattern

Change In Shareholding Pattern

	Jun-21	Mar-24	Change
Promoters +	69.50%	68.63%	-0.87%
FIIs +	12.47%	8.59%	-3.88%
DIIs +	6.69%	16.68%	9.99%
Public +	11.34%	6.09%	-5.25%

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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