Rate cycle benefit on net interest margin seems to be largely priced-in, and hence a significant improvement in card acquisitions and credit cost would be incremental triggers for SBI Cards when they emerge.
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Yes Securities Report
While indeed SBI Cards and Payment Services Ltd. seems to be at an inflection point in its credit cycle, the demonstration of reduction in delinquency flows/write-offs remains the key for sustaining the current valuation multiples of 25x P/E and 4.6x P/BV on FY27 estimates.
Rate cycle benefit on net interest margin seems to be largely priced-in, and hence a significant improvement in card acquisitions and credit cost would be incremental triggers when they emerge.
On relative benchmarking, we prefer Bajaj Finance with its stronger (less-cyclical) growth and RoE performance and available at lower valuation than SBI Cards.
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