Pranav Dheeeraj Gundlapalle, an analyst from Bernstein, maintained the Sell rating on SBI Cards & Payment Services Ltd. The associated price target is INR780.00.
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Pranav Dheeeraj Gundlapalle has given his Sell rating due to a combination of factors affecting SBI Cards & Payment Services Ltd. One of the primary concerns is the declining revolver-to-spends ratio, which has decreased from approximately 6% in FY21 to about 4% currently. This decline, coupled with SBI’s tightened customer-sourcing criteria, limits the potential for near-term improvement in this area.
Additionally, the company faces structural headwinds such as a weaker franchise compared to its peers and the risk posed by credit-card substitutes like RuPay on UPI transactions. Despite potential benefits from rate cuts, the growth in revolvers and EMI balances is expected to remain subdued, leading to a muted PPoP growth forecast of 10-15% for FY26-28E. Consequently, the EPS forecast for FY28E has been revised downward, and the target price adjusted to INR 780, reinforcing the Sell rating.
According to TipRanks, Dheeeraj Gundlapalle is a 4-star analyst with an average return of 18.3% and a 75.00% success rate. Dheeeraj Gundlapalle covers the Financial sector, focusing on stocks such as Axis Bank Limited, Bajaj Finance Limited, and HDFC Bank Limited.