Most analysts say ‘buy’, Goldman Sachs calls against the tide

Analysts continue to trust SBI Cards & Payment Services Ltd. after a rare “sell” call last week.

Goldman Sachs kicked off the coverage with a “sell,” according to its Jan. 7 note. The brokerage firm expects structural challenges from new customers using credit cards and headwinds to growth to intensify due to regulation and competition. He sees earnings growth moderating.

Macquarie, however, sees the credit card segment as the fastest growing segment within Indian financial services between FY22 and FY26, according to its Jan. 11 memo. The research firm expects the cards unit of India’s largest lender to be a ‘story of strong volume growth in a very underpenetrated credit card market’.

Prabhudas Lilladher predicts that the company’s non-performing assets will be largely flat in the quarter ending December.

Of the 23 analysts who follow the SBI charts, 20 have a “buy” rating, one recommends a “hold” and two suggest a “sell”, according to Bloomberg data. Axis Research is the only other brokerage to have a “sell” rating.

On Wednesday, SBI Cards snapped a four-day losing streak to rise 1.55%, the biggest intraday gain in two weeks. The stock, however, pared most of the gains to close up 0.97%.

Shares of SBI Cards have fallen 38% since its October peak even as Nifty 50 erased nearly all of the losses during the period.

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