In India SBI cards and payment services is the second-largest credit card user, launched in 1998. The company is a subsidiary of SBI (State Bank of India, India’s one of the largest commercial banks). The company offers a wide range of individual as well as corporate clients. It includes lifestyle, shopping, travel, fuel, banking partnership cards, corporate cards, etc. This content is about explaining the SBI Cards and Payment Services share price analysis and finding investment opportunities in it.
In the year 1998, the SBI card was launched by the SBI (India’s largest commercial bank) and GE Capital. The main objective of the company is to offer customer access to a wide range of top-level value-added payment products and services. They are trying to simplify the lives of their customers by offering a wide range of products.
SBI card has an easy money facility for its customers. The facility on the SBI Card company empowers the cardholders to avail funds for the short term and at a low rate of interest rate.
There is multiple beneficiary usage of the SBI card. The company has the lowest interest option. Users can easily have cash on the go and also encash up to or above their credit limit. Apart from this, they can transfer the outstanding balances of their other credit cards to SBI cards at minimum interest rates.
They offer varieties of credit card ranges. Among them, some of the credit cards gain high ratings from customers. Such as Air India SBI Platinum Card (Travel), SBI Card Prime (Premium and Lifestyle), SBI Card ELITE (Premium and Lifestyle), and Air India SBI Signature Card (Premium & Travel).
SBI Cards and Payment Services Company Details
- SBI cards have market shares of 17.6% and 18.0% of the Indian credit card market in terms of the number of credit cards outstanding (as of March 31, 2019, and September 30, 2019, respectively).
- They offer an extensive credit card portfolio to individual cardholders as well as corporate clients. This includes lifestyle, rewards, travel and fuel, shopping, banking partnership cards, and corporate cards. It covers all major cardholder segments in terms of income profiles along with lifestyles.
- In the time span between March 31, 2017, to March 31, 2019, their total credit card spending grew at a 54.2% CAGR.
- The company has a broad credit card portfolio that includes SBI Card-branded credit cards as well as co-branded credit cards. These bear both the SBI Card brand and their co-brand partners’ brands.
- We are also the largest co-brand credit card issuer in India as per the CRISIL Report. And the company has partnerships with many major players in the travel, fuel, fashion, healthcare and mobility industries. It includes Air India, Apollo Hospitals, BPCL, Etihad Guest, Fbb, IRCTC, OLA Money and Yatra, among others.
SBI Cards and Payment Services Products and Services
The products and services are as follows:
- Lifestyle cards
- Travel and fuel
- Banking partnerships
- Corporate Cards
- Central travel account
- Corporate purchase
White Label Cards
There are a few white-label cards in the product portfolio.
Value Added Service
- ATM cash
- Easy money
- Balance transfer
- Mr Rajnish Kumar: Non-executive Chairman
- Mr Dinesh Kumar Khara: Non-executive
- Mr Hardayal Prasad: Managing Director and Chief Executive Officer
- Mr Shree Prakash Singh: Non-executive
- The company is the second-largest credit card issuer in India. They have deep industry expertise as well as a good track record of growth and profitability.
- Their diversified customer acquisition capabilities.
- It is supported by a strong brand as well as a pre-eminent Promoter.
- Also their diversified portfolio of credit card offerings
- Efficient risk management and data analytics capabilities.
- Advanced and scalable technology company infrastructures.
- They are highly experienced as well as a professional management team.
Financial Data of SBI Cards and Payment Services
The company’s financial history is pretty good. The company has run through a big profit level. And it is expected that the company has a long way to go. The company’s EPS (earnings per share) stands at 23.9 (FY22 basic and diluted). Its PE ratio stands at 35.6, while the industry P/E is at 32.74. The stock is trading at 8.13 times its book value and hence we feel accumulation is possible only after a decent dip.
Technical Analysis of SBI Cards and Payment Services Share Price
The share’s IPO was priced at ₹750 to ₹755 per equity share. But when the listing of the share happened, the share opened at Rs 661, at a loss to the subscribers. Since then the stock is moving rangebound, with an all-time high of 1165 and an all-time low of 495. While analysing the technicals, we found that the current range of the share is between 650 to 1050.
Check the weekly chart of SBI Cards to identify the current range of the stock.
The SBI Cards and Payment Services share price analysis has revealed that its performance in the stock market is just up to the mark. The company’s shares have generated moderate returns over the short-term and very nominal returns in medium-term durations.
But the company is backed by enhanced customer convenience through new products and services and an expanding customer base. Furthermore, the financials of SBI Cards also look satisfactory with high net worth & total income figures. Hence, we believe that the best is yet to come for this stock. Therefore, overall this makes a strong case for investors to consider buying into SBI Cards in dips only as part of their investment portfolio strategy going forward.