Sbicard ltd long

SBI Cards and Payment Services Ltd. (SBICARD) is a leading credit card issuer in India, operating as a subsidiary of the State Bank of India. Here's a comprehensive analysis of its current situation:

**Fundamental Analysis:**

- **Financial Performance:**
- **Profit After Tax (PAT):** In Q3 FY2025, PAT declined by 30% to ₹3.83 billion, missing analysts' expectations of ₹4.59 billion. This drop was primarily due to increased write-offs and provisions for bad loans.
- **Revenue:** Revenue from operations remained stable at ₹46.19 billion in Q3 FY2025.
- **Asset Quality:** The gross non-performing assets (NPAs) ratio improved slightly to 3.24% from 3.27% in the previous quarter but was higher compared to 2.64% a year ago.


- **Valuation Metrics:**
- **Price-to-Earnings (P/E) Ratio:** As of February 24, 2025, the P/E ratio stands at 39.04, indicating a premium valuation compared to the industry average.
- **Price-to-Book (P/B) Ratio:** The P/B ratio is 5.92, reflecting a significant premium over the peer median of 1.59.

- **Analyst Ratings:**
- Macquarie upgraded SBICARD to 'Outperform' with a target price of ₹1,000, suggesting a potential upside of approximately 22.3% from the current market price.
- Nuvama maintained a 'Buy' rating, raising the target price to ₹885, indicating an 8% quarter-over-quarter rise in credit costs.

**Technical Analysis:**

- **Current Share Price:** As of February 24, 2025, the share price is ₹839.25.

- **Support and Resistance Levels:**
- **Support Level:** The immediate support is around ₹800, with a stronger support zone near ₹750.
- **Resistance Level:** The immediate resistance is near ₹860, with a stronger resistance around ₹900.

- **Price Performance:**
- Over the past month, the stock has risen by 9.52%.
- Over the past year, the stock has shown a 13.03% increase.

**Recent Developments:**

- In Q3 FY2025, the company reported a 30% decline in PAT due to higher write-offs and provisions for bad loans.

- The gross NPA ratio improved slightly to 3.24% from 3.27% in the previous quarter but was higher compared to 2.64% a year ago.
**Conclusion:**

SBI Cards and Payment Services Ltd. is navigating challenges related to asset quality and increased provisions. While the stock is trading at a premium valuation, recent analyst upgrades suggest potential for growth. Investors should monitor the company's efforts to improve asset quality and manage provisions effectively.