ICICI Securities Reiterates Buy Call on SBFC Finance with Price Target of Rs 130

ICICI Securities Maintains BUY Rating for SBFC Finance

SBFC Finance (SBFC) has continued to execute on its medium-term guidance, as evident in its robust return on equity (RoE) expansion to 14.5% in Q4FY26, a more than 100 basis points (bps) year-over-year (YoY) improvement. The profitability enhancement was underpinned by operational efficiencies, with cost to assets declining 80bps YoY and higher spread (up more than 50bps YoY), effectively offsetting approximately 35bps of uptick in credit cost during Q4FY26.

Outlook Remains Positive for SBFC Finance

Despite the management's awareness of potential headwinds from geopolitical volatility on its target segments, high-frequency data remains encouraging. Cheque bounce rates for April 26 trended marginally lower versus March 26 levels, signaling no immediate asset quality stress.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Maintaining BUY Rating and Target Price

ICICI Securities maintains its BUY rating for SBFC Finance with an unchanged target price (TP) of INR 130, based on a 3.3x FY27E book value per share (BVPS). The research firm expects SBFC to maintain its dominant position in SME financing, as it is the only pan-India player focusing on ticket sizes below INR 2.5mn. ICICI Securities remains confident that SBFC could deliver a CAGR of approximately 24% in assets under management (AUM) over FY26–28E and achieve a RoE of approximately 15% by FY28E.