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SBI Cards & Payment Services
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SBI Cards and Payment Services Limited was incorporated as a private limited company with the name 'SBI Cards and Payment Services Private Limited' on May 15, 1998 in New Delhi. On the conversion of Company to a public limited company, the name was changed to, 'SBI Cards and Payment Services Limited' on August 20, 2019. The Company is engaged in the business of issuing credit cards to consumers. It also acts as corporate insurance agent for selling insurance policies to credit card customers.
SBI Cards and Payment Services Limited is a subsidiary of State Bank of India (SBI), is the second largest credit card issuer in the country. With more than 1.68 crore cards in force, the Company offer financial access through wide range of value-added payment products and services that fulfill transactional and credit requirements. It focus on delivering a diverse portfolio of credit cards, which support cashless and contactless digital payments in India while ensuring safety and transparency of transactions.
The Company started its operations in 1998, and since then SBI's parentage and highly trusted brand have allowed it to quickly establish a reputation of trust, reliability and transparency with its cardholders. According to the RBI, the company has grown its business faster than the Indian credit card market over the past three years both in terms of numbers of credit cards outstanding and amounts of credit card spends, and the company believes it has achieved this by leveraging its strength and capitalizing on India's favourable economic and demographic changes, including its strong macroeconomic performance, rising affluence, increasing consumer demand, rapid urbanization and the growth of e-commerce platforms. From March 31, 2017 to March 31, 2019 its total credit card spends grew at a 54.2% CAGR (as compared to a 35.6% CAGR for the overall credit card industry, according to the RBI) and the number of its credit cards outstanding grew at a 34.5% CAGR (as compared to a 25.6% CAGR for the overall credit card industry, according to the RBI).
SBI Cards has a broad credit card portfolio that includes SBI Card-branded credit cards as well as co-branded credit cards that bear both the SBI Card brand and its co-brand partners' brands. The Company offers four primary SBI Card branded credit cards: SimplySave, SimplyClick, Prime and Elite, each catering to a varying set of cardholder needs. The Company is also the largest co-brand credit card issuer in India according to the CRISIL Report, and it has partnerships with several major players in the travel, fuel, fashion, healthcare and mobility industries, including Air India, Apollo Hospitals, BPCL, Etihad Guest, Fbb, IRCTC, OLA Money and Yatra, among others. The Credit cards portfolio is tailored to meet a diverse range of cardholder needs across the entire spectrum of its cardholders' income profiles and lifestyles, from the 'premium' cardholder category to the 'affluent', 'mass affluent', 'mass' and 'new to credit' categories. The Company issues its credit cards in partnership with the Visa, MasterCard and RuPay payment networks, and it is continuously looking to expand its payment network partnerships to broaden the reach and functionality of its credit card offerings.
SBI Cards has a diversified customer acquisition network that enables it to engage prospective customers across multiple channels. The Company deploys a sales force of 32,677 outsourced sales personnel as of December 31, 2019 operating out of 145 Indian cities and which engages prospective customers through multiple channels, including physical points of sale in bank branches, retail stores, malls, fuel stations, railway stations, airports, corporate parks and offices, as well as through tele-sales, online channels, email, SMS marketing and mobile applications. The Company is the leading player in open market customer acquisition in India according to the CRISIL Report. SBI Cards had a presence in 3,190 open market points of sale across India as of December 31, 2019. In addition, its partnership with SBI provides access to SBI's extensive network of 21,961 branches across India, which enables it to market their credit cards to SBI's vast customer base of 445.5 million customers as of December 31, 2019. Its extensive physical customer acquisition network is complemented by its digital sales and marketing capabilities which include their website, mobile application and online, email and SMS marketing platforms.
SBI Card sourced 34.1 lakh new accounts in FY 2020. It launched 8 new products across diverse categories and segments such as Lifestyle Home Centre, Max, Spar SBI Card, Club Vistara SBI Card, Central Bank of India SBI Card, City Union Bank SBI Card, Shaurya SBI Card, SBI Card Vyapaar Unnati, Ola Money SBI Card and IRCTC SBI Card Premier. It started issuing RuPay denominated card from September 2019 with the launch of Shaurya Cards. It engaged with leading merchant partners across categories from apparel, consumer durables to online shopping, healthcare, utility bill payments to provide value to cardholders on transacting with SBI Card.
In FY20, in line with Hon'ble NCLT Order dated June 04, 2019, erstwhile SBI Business Process Management Services Pvt. Ltd (SBIBPMSL) amalgamated with SBI Cards and Payment Services Limited from the appointed date i.e. April 1, 2018. Pursuant to said Amalgamation, the Company allotted 9,51,12,054 fully paid equity shares of Rs. 10 each to the shareholders of erstwhile SBIBPMSL.
In FY 2021, the Company launched BPCL SBI Card OCTANE, a premium version of the existing card. It also launched AURUM in a superior premium segment card, targeted at CXO's. It sourced 26.9 Lac new accounts in FY21. It launched IRCTC SBI Card on RuPay platform, Delhi Metro SBI Card, Paytm SBI Card, SBI Elite and Prime Amex-SBI Card. It partnered with American Express (AMEX network to issue credit cards on their payment network.
In FY 2022, the Company launched Nature's Basket SBI Card, SBI Card PULSE, Aditya Birla SBI Card, SBI Card SPRINT and Fabindia SBI Card. It sourced 35.72 lacs new accounts to reach 1.38 Crore in FY 2022. Apart from this, it focused on digital acquisition channels for sourcing of new accounts.
During FY2023, the Company introduced 52.02 lakh new accounts. The Company launched three card variants comprising of CASHBACK SBI Card, Aditya Birla SBI Card and Punjab & Sind Bank (PSB) SBI Card.
SBI Cards & Payment Services share price reflects investor sentiment toward the company and is impacted by various factors such as financial performance, market trends, and economic conditions. Share price is an indicator which shows the current value of the company's shares at which buyers or sellers can transact.
Market capitalization of SBI Cards & Payment Services indicates the total value of its outstanding shares. Marketcap is calculated by multiplying share price and outstanding shares of the company. It is a helpful metric for assessing the company's size and market Valuation. It also helps investors understand how SBI Cards & Payment Services is valued compared to its competitors.
SBI Cards & Payment Services PE ratio helps investors understand what is the market value of each stock compared to SBI Cards & Payment Services 's earnings. A PE ratio higher than the average industry PE could indicate an overvaluation of the stock, whereas a lower PE compared to the average industry PE could indicate an undervaluation.
The PEG ratio of SBI Cards & Payment Services evaluates its PE ratio in relation to its growth rate. A PEG ratio of 1 indicates a fair value, a PEG ratio of less than 1 indicates undervaluation, and a PEG ratio of more than 1 indicates overvaluation.
Return on Equity (ROE) measures how effectively SBI Cards & Payment Services generates profit from shareholders' equity. A higher ROE of more than 20% indicates better financial performance in terms of profitability.
Return on Capital Employed (ROCE) evaluates the profitability of SBI Cards & Payment Services in relation to its capital employed. In simple terms, ROCE provides insight to investors as to how well the company is utilizing the capital deployed. A high ROCE of more than 20% shows that the business is making profitable use of its capital.
Total debt of SBI Cards & Payment Services shows how much the company owes to either banks or individual creditors. In simple terms, this is the amount the company has to repay. Total debt can be a very useful metric to show the financial health of the company. Total debt more than equity is considered to be a bad sign.
The Debt-to-Equity (DE) ratio of SBI Cards & Payment Services compares its total debt to shareholders' equity. A higher Debt to Equity ratio could indicate higher financial risk, while a lower ratio suggests that the company is managing its debt efficiently.
CAGR shows the consistent growth rate of SBI Cards & Payment Services over a specific period, whether it is over a month, a year, or 10 years. It is a key metric to evaluate the company’s long-term growth potential. Main metrics for which CAGR is calculated are net sales, net profit, operating profit, and stock returns.
Technical analysis of SBI Cards & Payment Services helps investors get an insight into when they can enter or exit the stock. Key components of SBI Cards & Payment Services Technical Analysis include:
There are usually multiple support levels, but the main support levels for a stock are S1, S2, S3. Support levels indicate price points where stock might get support from buyers, helping the stock stop falling and rise.
There are usually multiple resistance levels, but the main resistance levels for a stock are R1, R2, R3. Resistance levels represent price points where SBI Cards & Payment Services shares often struggle to rise above due to selling pressure.
Dividends refer to the portion of the company’s profits distributed to its shareholders. Dividends are typically paid out in cash and reflect SBI Cards & Payment Services ’s financial health and profitability.
Bonus shares are usually given by companies to make the stock more affordable, increase liquidity, boost investor confidence, and more.
Stock split increases the number of its outstanding shares by dividing each existing share into multiple shares. When the company offers a stock split, the face value of the stock reduces in the same proportion as the split ratio.
The financials of SBI Cards & Payment Services provide a complete view to investors about its net sales, net profit, operating profits, expenses, and overall financial health. Investors can analyze financial data to assess the company’s stability and also understand how the company has been growing financially.
The profit and loss statement of SBI Cards & Payment Services highlights its net sales, net profit, total expenditure, and operating profits in the current financial year. This Profit and Loss statement is crucial for evaluating the profitability and financial stability of SBI Cards & Payment Services .
The balance sheet presents a snapshot of SBI Cards & Payment Services ’s assets, liabilities, and equity of shareholders, providing insights into the financials of the company.
Cashflow statements track the company's cash inflows and outflows over a period. It is an essential tool for understanding how well the company manages its liquidity and finances.
SBI Cards & Payment Services Net Interest Margin (NIM) tells about the profitability earned by all NBFCs and financial institutions. It represents the income generated by the bank from the difference between the interest earned on loans and the interest paid on public deposits. Net Interest Margin (NIM) is a metric that monitors the profitability generated from a bank's lending activities.
Non-Performing Assets (NPA) indicate the ratio of a bank's loans that are classified as non-performing. A lower NPA ratio reflects stronger asset quality and more effective risk management.
Capital Adequacy Ratio (CAR) is a metric to measure the bank's ability to absorb losses and still remain financially stable. A higher CAR shows that the bank is financially sound and can absorb potential losses.
Gross NPA is the percentage of total non-performing loans before provisioning, while net NPA is the percentage after provisioning. Lower gross and net NPA ratios indicate better loan quality.
Net NPA is the actual losses a bank has incurred due to NPA accounts. Lower the NPA, better the banks can maintain stable income from interest on loans.
CASA ratio tells how much of a bank's total deposits are in both current and savings accounts.
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