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SBICARD: Future Margins Will Likely Weaken Despite New Travel Card Launch

UPI Growth And Data Risks Will Erode Credit Returns

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SBICARD
AnalystLowTarget
Not Invested
Published 23 Jun 2025

Update shared on 15 Dec 2025

Fair value Decreased 1.58%
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AnalystLowTarget's Fair Value
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1Y
26.7%
7D
-0.5%

Analysts have trimmed their price target on SBI Cards and Payment Services slightly, from ₹675 to about ₹664, citing modestly lower profit margin and valuation multiple assumptions that more than offset a marginal uplift in long term revenue growth and a reduced discount rate.

What's in the News

  • Upcoming board meeting scheduled for October 24, 2025, to review and approve unaudited financial results for the quarter and half-year ended September 30, 2025, and consider other matters (company filing)
  • Launch of co-branded IndiGo SBI Card and IndiGo SBI Card ELITE under the IndiGo BluChip loyalty program, targeting frequent travelers with premium benefits (company announcement)
  • New cards offer elevated rewards on IndiGo ecosystem spends, including rewards of up to 7 percent on the ELITE variant and 3 percent on the standard card, enhancing travel-linked earnings (company announcement)
  • Additional rewards on hotel and travel bookings outside IndiGo, plus base rewards on other categories, positioning the products as comprehensive travel spending solutions (company announcement)
  • Rewards credited as IndiGo BluChips each statement cycle, redeemable for flights, hotels, seat upgrades, meals, and ancillary services, with the potential to earn up to 29,000 bonus BluChips annually (company announcement)

Valuation Changes

  • Consensus analyst price target has been reduced slightly from ₹675 to about ₹664, reflecting a modest downward revision in fair value.
  • The discount rate has been lowered marginally from 16.56 percent to about 16.02 percent, implying a slightly reduced perceived risk profile or cost of capital.
  • Revenue growth has been revised up slightly from 29.39 percent to about 29.78 percent, indicating a modestly stronger long-term growth outlook.
  • The net profit margin has been trimmed slightly from 17.39 percent to about 17.08 percent, pointing to expectations of marginally lower profitability.
  • The future P/E has been reduced meaningfully from about 26.35x to 24.68x, signaling a moderation in valuation multiples applied to forward earnings.

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Disclaimer

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