Target price, current market price and business performance
The current market price (CMP) of the SBI cards is Rs. 785. Yes Securities has estimated a target price for the stock at Rs. of the coming year. It is a large-cap company with a market capitalization of around Rs. 69,007 crores.
| Stock market outlook | |
|---|---|
| Current market price (CMP) | Rs.785 |
| Target price | Rs.1260 |
| Potential return over 1 year | 60.50% |
| Stock price at 52-week high | Rs.1,165.00 |
| 52 week low price | Rs. 710.80 |
The company’s operating income in FY22 was recorded at Rs. 106,773m which is expected to be Rs. 127,241m in FY23. in FY22 was Rs. 96,500m which is expected to be Rs. 113,414m in FY23. The net profit of the company in FY22 was recorded at Rs. 16,162m, which is expected to be at Rs. 21,282m in FY 23.
In terms of asset quality and cost of credit, the company’s GNPL (2.3%) and ECL (3.3%) are currently at pre-Covid levels; thus, returning to the pre-pandemic cost of credit of around 6.5% is then not a challenge – efforts are also being made to optimize the cost of credit by actively managing the quality of acquisition (learning from mistakes ).
Securities Comments: Benefits and Risks of Securities
According to Yes Securities, “We estimate a CAGR of 20-22% in CIF and receivables in FY22-24. % which was the pre-pandemic measure (adjusted for capital base). of the growing scale of new-age card cos and BNPL. Being the only listed pure-play credit card issuer with significantly higher profitability than banks and NBFCs (in good times and bad), SBI Cards would continue to command a premium assessment. Clients onboarded during FY22 were less risky as the company gradually opened its appetite for relatively riskier profiles/segments – there was a corresponding impact on the receivables mix (revolver share remained low ).”
Company Profile
The SBI card was launched in October 1998 by the State Bank of India and GE Capital. Incorporated as SBI Cards and Payment Services Private Limited (SBICPSL), SBI Card is headquartered in Gurgaon, Haryana. Within 10 months of its inception, they reached a credit card customer base of 1 lakh. They entered the “1Million Card Club” in 2002 and passed the 2 million card mark in 2005. They are the second largest credit card provider in the country, with a base of more than 13 million cards in force. The company wishes to maintain a balance in supply between the open market and the SBI channel. About 20-25% of the banca supply comes from the YONO – co app. Runs programs/engagements with Flipkart a few times throughout the year; mainly during festival times.
Disclaimer
The stock above was selected from the Yes Securities brokerage report. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.
