External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<div><ul><li>Margin contracts 80bp QoQ as Revolver mix moderates to 25% - <span style="font-size: var(--content-font-size);">SBICARD reported a mixed quarter, with a miss in NII/PPOP, while net earnings delivered a significant beat, aided by a sharp decline in provisions. </span></li><li><span style="font-size: var(--content-font-size);">Robust growth in spends; RBI-RE book declines to below 1%  - </span><span style="font-size: var(--content-font-size);">SBICARD reported a PAT of INR5.8b (+231% YoY/+51% QoQ), led by lower credit costs, as provisions declined to INR3.9b (-37% QoQ) on improving asset quality and reversal of management overlay provisions of INR760m.</span></li><li><span style="font-size: var(--content-font-size);">Highlights from the management commentary - The recent RBI Master Circular on Credit Cards is an important regulation and is applicable from 1st Jul’22. However, SBICARD is well covered on most aspects.</span></li></ul></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Margin contracts 80bp QoQ as Revolver mix moderates to 25% - SBICARD reported a mixed quarter, with a miss in NII/PPOP, while net earnings delivered a significant beat, aided by a sharp decline in provisions. Robust growth in spends; RBI-RE book declines to below 1%  - SBICARD reported a PAT of INR5.8b (+231% YoY/+51% QoQ), led by lower credit costs, as provisions declined to INR3.9b (-37% QoQ) on improving asset quality and reversal of management overlay provisions of INR760m.Highlights from the management commentary - The recent RBI Master Circular on Credit Cards is an important regulation and is applicable from 1st Jul’22. However, SBICARD is well covered on most aspects.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

4QFY22 Results Update - SBI Cards and Payment Services

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<div><div><div><ul><li>Earnings profile continues to improve: SBI Cards reported strong PPOP growth (+34% YoY) on the back of strong fee income (+28% YoY) and improving cost efficiency.</li></ul><div><div><div><ul><li>Releveraging of balance sheet slower than expected: The share of revolve in the loan mix reduced further to 25% (Q4FY21: 28%), driving NIMs lower.</li></ul><div><div><div><ul><li>Reversion to steady state to drive high return ratios: SBI Cards delivered RoA/RoE of 7/30% in Q4FY22 despite muted NII due to lower credit costs.</li></ul></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Earnings profile continues to improve: SBI Cards reported strong PPOP growth (+34% YoY) on the back of strong fee income (+28% YoY) and improving cost efficiency.Releveraging of balance sheet slower than expected: The share of revolve in the loan mix reduced further to 25% (Q4FY21: 28%), driving NIMs lower.Reversion to steady state to drive high return ratios: SBI Cards delivered RoA/RoE of 7/30% in Q4FY22 despite muted NII due to lower credit costs.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SBI Cards and Payment Services - Releveraging of Portfolio Remains WIP

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

ICICI Securities Ltd

ICICI Securities Limited provides investment services. The Company provides corporate and investment banking, securities, wealth management, retail brokerage, initial public offerings, and advisory services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<p>Q3FY22 performance of SBI Cards (SBIC) was directionally strong in terms of<br>gross account additions (1mn), spending growth (46% QoQ) and asset quality<br>(credit cost/GNPA of 9.0%/2.4% vs 9.3%/3.4% in Q2FY22). The activation rates<br>(30-day) are also high at 52% in Q3FY22 vs 50% in Q2FY22. Maintain buy with share price target of Rs. 1060</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Q3FY22 performance of SBI Cards (SBIC) was directionally strong in terms of gross account additions (1mn), spending growth (46% QoQ) and asset quality (credit cost/GNPA of 9.0%/2.4% vs 9.3%/3.4% in Q2FY22). The activation rates (30-day) are also high at 52% in Q3FY22 vs 50% in Q2FY22. Maintain buy with share price target of Rs. 1060Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sequential improvement in key business parameters

<p>We initiate on SBI Cards with BUY and RI-based target price of INR1,100. SBI Cards and Payment Services (SBI Cards), India's second largest credit card issuer, has established itself as an enviable franchise, delivering on all fronts (~40% EPS CAGR from FY18 to FY20, ~5-6% RoA, prudent risk management, etc.). With a balanced customer acquisition strategy across open market and banca (SBI), SBI Cards has diversified its revenue streams (fee income at ~50% of total income) to drive earnings, which is poised for a 45% EPS CAGR over FY21-FY24E.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We initiate on SBI Cards with BUY and RI-based target price of INR1,100. SBI Cards and Payment Services (SBI Cards), India's second largest credit card issuer, has established itself as an enviable franchise, delivering on all fronts (~40% EPS CAGR from FY18 to FY20, ~5-6% RoA, prudent risk management, etc.). With a balanced customer acquisition strategy across open market and banca (SBI), SBI Cards has diversified its revenue streams (fee income at ~50% of total income) to drive earnings, which is poised for a 45% EPS CAGR over FY21-FY24E.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SBI Cards and Payment Services (Initiating Coverage): Top-of-the-crest play. BUY

<p>RBI proposed to issue a discussion paper in the next one month (link to RBI statement) to cover aspects related to charges involved in various digital payment modes covering Credit Cards, Debit Cards, PPIs, UPIs, etc. This is with the intent to make digital transactions affordable to users and economically viable to providers. SBICARD has corrected ~9% over the past two days on fears of a reduction in MDR charges, which can adversely impact profitability. SBICARD's spend-based fee constitutes 45-54% of total fees and corresponds to 18-23% of total revenue.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

RBI proposed to issue a discussion paper in the next one month (link to RBI statement) to cover aspects related to charges involved in various digital payment modes covering Credit Cards, Debit Cards, PPIs, UPIs, etc. This is with the intent to make digital transactions affordable to users and economically viable to providers. SBICARD has corrected ~9% over the past two days on fears of a reduction in MDR charges, which can adversely impact profitability. SBICARD's spend-based fee constitutes 45-54% of total fees and corresponds to 18-23% of total revenue.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Review of digital payment charges poses an overhang

India

SBI Card is an Indian non-banking financial company that specializes in issuing credit cards and providing related payment services to individual and corporate customers. It offers a diverse portfolio of credit cards, including lifestyle, rewards, travel & fuel, and banking partnership cards, along with corporate card solutions. The company was founded in 1998 as a joint venture and is headquartered in Gurugram, India.

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SBI Card (SBICARD IN)

4QFY22 Results Update - SBI Cards and Payment Services

SBICARD reported a mixed quarter, with a miss in NII/PPOP, while net earnings delivered a significant beat, aided by a sharp decline in provisions.

Motilal Oswal

SBI Cards and Payment Services - Releveraging of Portfolio Remains WIP

SBI Cards reported earnings 17% above our estimates due to lower-than- expected provisioning (3.3% net credit costs) as the stress pool continued...

HDFC Securities

Sequential improvement in key business parameters

Q3FY22 performance of SBI Cards (SBIC) was directionally strong in terms of<br>gross account additions (1mn), spending growth (46% QoQ) and asset...

ICICI Securities Limited

SBI Cards and Payment Services (Initiating Coverage): Top-of-the-crest play. BUY

We initiate on SBI Cards with BUY and RI-based target price of INR1,100. SBI Cards and Payment Services (SBI Cards), India's second largest...

HDFC Securities

Review of digital payment charges poses an overhang

RBI proposed to issue a discussion paper in the next one month (link to RBI statement) to cover aspects related to charges involved in various...

Motilal Oswal

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4QFY22 Results Update - SBI Cards and Payment Services

SBICARD reported a mixed quarter, with a miss in NII/PPOP, while net earnings delivered a significant beat, aided by a sharp decline in provisions.

Motilal Oswal

SBI Cards and Payment Services - Releveraging of Portfolio Remains WIP

SBI Cards reported earnings 17% above our estimates due to lower-than- expected provisioning (3.3% net credit costs) as the stress pool continued...

HDFC Securities

Sequential improvement in key business parameters

Q3FY22 performance of SBI Cards (SBIC) was directionally strong in terms of<br>gross account additions (1mn), spending growth (46% QoQ) and asset...

ICICI Securities Limited

SBI Cards and Payment Services (Initiating Coverage): Top-of-the-crest play. BUY

We initiate on SBI Cards with BUY and RI-based target price of INR1,100. SBI Cards and Payment Services (SBI Cards), India&#x27;s second largest...

HDFC Securities

Review of digital payment charges poses an overhang

RBI proposed to issue a discussion paper in the next one month (link to RBI statement) to cover aspects related to charges involved in various...

Motilal Oswal

We initiate on SBI Cards with BUY and RI-based target price of INR1,100. SBI Cards and Payment Services (SBI Cards), India's second largest...