Motilal Oswal Maintains Neutral Rating on SBI Cards, Targets Rs 760
SBI Cards Posts Strong 4QFY26 Results Amid Lower Provisions
SBI Cards, a leading credit card issuer in India, has reported a strong set of financial results for the fourth quarter of FY26. The company's PAT (Profit After Tax) stood at INR6.09 billion, marking a 14% year-on-year growth and a 9% quarter-on-quarter increase. This performance is notable, given the company's lower-than-expected provisions.
The net interest margins (NIMs) of SBI Cards expanded by 10 basis points (bps) on a quarter-on-quarter basis to 11.1%. This growth was driven by a moderation in credit off-take (CoF) being partly offset by a moderate decline in yields. The management expects the company's margins to remain broadly stable going forward.
Outlook and Recommendations
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
As part of its research report, Motilal Oswal has maintained its earnings estimates for SBI Cards, forecasting a return on assets (RoA) and return on equity (RoE) of 4.15% and 17.3% by FY27, respectively. The research firm has also reiterated its neutral rating on the stock, with a revised target price (TP) of INR760, based on a price-to-earnings (P/E) ratio of 22 times the estimated earnings per share (EPS) for September 2027.
| Company | FY26 Q4 PAT Growth (YoY) | QoQ PAT Growth |
|---|---|---|
| SBI Cards | 14% | 9% |
Note: YoY denotes year-on-year growth, and QoQ denotes quarter-on-quarter growth.
Investor Takeaway
Maintain Neutral rating on SBI Cards with a target price of Rs 760.
More in Market
Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Indian Stocks to Watch: BHEL, Agarwal Industrial, JBM Auto, Rajesh Exports, Indian Energy Exchange, Lenskart Solutions in Market Focus on June 4.
