SBI Card Stock Target: SBI Card pays interim dividend of Rs 2.5/share and sets record date.
“The board of directors has decided to pay an interim dividend of ₹2.5 per share (25%) for the financial year 2023-24,” the company said in a filing.
The interim dividend is expected to be paid on or before April 17, 2024.
A company’s stock typically trades pre-dividend on or before the record date. If a company goes ex-dividend on a certain date, the stock will not be worth the next dividend payment. The ex-dividend date also indicates which shareholders are eligible to receive dividends.
SBI Cards and Payment Services offers a wide range of credit to individual cardholders and corporate customers, including lifestyle, rewards, travel and fuel, and bank partnership cards, along with corporate cards covering all major cardholder segments. A non-bank financial company that offers a portfolio of cards. In terms of income profile and lifestyle.
The brand has cards measuring approximately 18.5mm and larger as of December 2023. We have a diverse customer acquisition network that allows you to attract potential customers across a variety of channels. Total revenue in the latest third quarter rose 30 per cent to Rs 4,742. We achieved KRW 200 billion thanks to a 29% increase in interest income and a 34% increase in non-interest income. Profit after tax rose 8% to Rs 549 crore during the same period. Shares of SBI Cards have underperformed the benchmark so far this year, posting a minus-9% return. Brokerage Nomura is negative on the stock, with a 100% unsecured book and suppressed RoE profile over the past 10 years.
Based on the residual income model, we value SBI Card at Rs 640 and value the stock at 4.1 times FY25F BVPS.
Risks that could hinder the achievement of the target price include higher-than-expected revolver segment appreciation while maintaining original asset quality, reduced competitive intensity to drive growth and margins, and positive regulation related to the uncapped MDR.
