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Foreign brokerages, including HSBC and Macquarie, have now upgraded the stock, setting a 12-month target price of ₹1,000.
HSBC upgraded the stock to “Buy” from “Reduce”, significantly raising its target price by 79% to ₹1,000 from its previous ₹560. The brokerage cited improved card issuance and softening money market rates as key positives. HSBC also noted that a decline in credit costs could lead to sharp EPS upgrades, adding that an earnings upgrade cycle now seems more likely given the positive asset quality trends in Q3FY25.
Similarly, Macquarie upgraded the stock to “Outperform” from “Neutral” last week, raising its target price from ₹735 to ₹1,000. The brokerage highlighted that credit card slippages are stabilizing and expects a material decline in credit costs over the next two quarters.Also read: SBI Card Shares Upgrade: What prompted a 36% price target increase from this analyst?
Other catalysts include falling interest rates, easing liquidity, and tax cuts, along with the Reserve Bank of India’s (RBI) softer stance on unsecured loans.
For the December 2024 quarter, SBI Cards reported a 30% YoY decline in net profit to ₹383.2 crore, while net interest income (NII) fell 3.5% to ₹3,790.1 crore. However, asset quality improved, with gross NPAs falling to 3.24% from 3.27% in the previous quarter.
As of now, SBI Cards shares are trading at ₹865.70 on the NSE, up 1% from the previous close.
