1. At a Glance
India’s second-largest credit card issuer, SBI Cards, is juggling growth, rising NPAs, and falling margins—while trading at 44x earnings. Is this the Visa to your portfolio’s success story or just a cashback illusion?
2. Introduction with Hook
Picture a juggler on a unicycle. Now give him rising interest costs, regulatory overhangs, and 85 million swipes a day. Voilà—SBI Cards.
- Market cap: ₹85,000 Cr, ROE: 15%, but P/E: 44.4
- Net Profit fell 20% YoY in FY25
- Yet stock is up 21% in 1 year. Why? Because FOMO > fundamentals.
3. Business Model (WTF Do They Even Do?)
SBI Cards is a pure-play credit card NBFC, offering:
- Credit cards across retail & corporate segments
- EMI conversion, balance transfers, and merchant offers
- Co-branded cards (IRCTC, Ola, Air India, etc.)
- 100% digital onboarding with SBI’s network backing it all
Revenue streams:
- Interest income (57%)
- Fees & charges (late fees, renewal, FX markups—yeah, you pay those)
- MDR from merchants
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 13,670 | 16,986 | 18,072 |
| Net Profit (₹ Cr) | 2,258 | 2,408 | 1,916 |
| EPS (₹) | 23.87 | 25.32 | 20.14 |
| Net NPA % | 0.87% | 1.19% | 1.46% |
| Dividend Payout % | 10% | 10% | 12% |
| Financing Margin | 19% | 17% | 12% |
🧨 FY25 Net Profit dropped 20% YoY. Margin pressure is real.
📉 Gross NPAs creeping up = customer stress.
5. Valuation
- P/E = 44.4 — priced like a tech stock, but delivers like an NBFC
- Book Value = ₹145, Price/BV = 6.17x
- Fair Value Range = ₹725 – ₹860
(based on blended P/E of 30–35 and adjusted EPS recovery for FY26)
It’s swipe now, think later logic at play in markets right now.
6. What’s Cooking – News, Triggers, Drama
🔥 Latest Updates:
- Appointed new Chief Risk Officer (Jul 2025)
- Gross NPAs at 3.08%, highest in 12 quarters
- SBI’s shareholding inching down—but still fully in control
🥵 Watch Out For:
- RBI clampdowns on unsecured lending
- Interchange fee regulation
- Rising interest rates squeezing margins further
7. Balance Sheet
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 946 Cr | 951 Cr | 951 Cr |
| Reserves | 8,884 Cr | 11,133 Cr | 12,830 Cr |
| Borrowings | 31,110 Cr | 39,891 Cr | 44,947 Cr |
| Total Liabilities | 45,546 Cr | 58,171 Cr | 65,546 Cr |
🧾 Debt-heavy NBFC model, but still investment-grade rated
📈 Reserves rising, but so is leverage
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net CF (₹ Cr) |
|---|---|---|---|---|
| FY23 | -6,671 | -921 | 7,824 | 232 |
| FY24 | -5,452 | -1,457 | 8,401 | 1,492 |
| FY25 | -2,140 | -2,491 | 4,687 | 55 |
💸 Negative operating cash flow = classic NBFC
📦 Heavy investing in credit portfolios, but with thin returns lately
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE (%) | 26% | 22% | 15% |
| ROCE (%) | 10.4% | 10.4% | 10.4% |
| Gross NPA (%) | 2.35% | 3.27% | 3.08% |
| Net NPA (%) | 0.87% | 1.19% | 1.46% |
📉 ROE trending down—hello margin squeeze
🔥 NPAs up = your cousin’s unpaid EMI is now SBI’s headache
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | Financing Margin (%) |
|---|---|---|---|
| FY23 | 13,670 | 2,258 | 19% |
| FY24 | 16,986 | 2,408 | 17% |
| FY25 | 18,072 | 1,916 | 12% |
💥 Revenue growing, but profits aren’t keeping up
📉 Margin compression from 19% → 12% in 2 years
11. Peer Comparison
| Company | P/E | ROE (%) | Gross NPA (%) | Net Profit (₹ Cr) | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Bajaj Finance | 34.6 | 19.2 | NA | 16,664 | 5,76,872 |
| Chola Finance | 30.7 | 19.7 | NA | 4,263 | 1,30,997 |
| Shriram Finance | 15.7 | 15.6 | NA | 8,209 | 1,28,738 |
| Muthoot Finance | 19.9 | 19.6 | NA | 5,333 | 1,06,604 |
| SBI Cards | 44.4 | 14.8 | 3.08 | 1,916 | 85,048 |
🏷️ Valuation way above peer average, despite lower RoE and high NPAs
👑 Brand strength = premium multiple, but fundamentals lagging
12. Miscellaneous – Shareholding, Promoters
| Shareholder Type | Mar 2025 |
|---|---|
| Promoters | 68.60% |
| FIIs | 9.88% |
| DIIs | 17.22% |
| Public | 4.30% |
- Promoter = SBI. The elephant in every board meeting
- Public holding is tiny, FII/DII doing the real weightlifting
- No insider scandals or weird pledging history = thumbs up
13. EduInvesting Verdict™
SBI Cards is a slick, branded, profit-generating beast—but it’s entering a slippery slope. ROE is falling. NPAs are rising. Margins are shrinking like last year’s Diwali jeans.
Still, its brand moat, SBI parentage, and credit card penetration story make it hard to ignore. Just don’t expect this to be a 10x swipe-and-forget story.
Metadata
– Written by EduInvesting Research | July 15, 2025
– Tags: Credit Cards, NBFC, SBI, Consumer Finance, EMI Bubble, Fintech vs Banks
