SBI Cards (SBICARD)

FairStock Score: 45/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 68.58% under SBI gives strong parentage and alignment.
• Sales growth of 9.19% shows the credit card franchise is still expanding.
• ROE of 15.18% and Piotroski F-Score of 7/9 indicate reasonable profitability and accounting quality.
• Latest quarter operating scale is substantial: ₹5,127 Cr sales and ₹557 Cr net profit.

Concerns

• Profit growth is negative at -13.19%, yet the stock trades at a high P/E of 35.23 and P/B of 4.70.
• Balance sheet is stretched: Debt/Equity 3.26, negative FCF of -₹4,631 Cr, and Altman Z-Score 1.45.
• Graham Number of ₹268.17 implies a -188.77% margin of safety at ₹680.85.
• Dividend yield is a negligible 0.32%, with EV/EBITDA at 787.19 offering no valuation support.

AI Analysis

When I look at SBI Cards, I first acknowledge that this is not a bad franchise. The SBI name, with promoter holding at 68.58%, gives it strong parentage and distribution advantages in Indian credit cards. Revenue is still expanding—sales grew 9.19%—and the latest quarter shows ₹5,127 Cr of sales and ₹557 Cr of net profit. A ROE of 15.18% is respectable, and the Piotroski F-Score of 7/9 says the company is not deteriorating on every accounting dimension. But my investment decision rests on price versus value, and here the arithmetic is sobering. At ₹680.85, the stock trades at 35.23 times earnings and 4.70 times book value, even though profits fell 13.19% year-on-year. The Graham Number, the most conservative benchmark I use, is just ₹268.17—meaning my margin of safety is approximately -188.77%. That is not investing; it is speculation on continued optimism. What worries me more is the financial health underneath. Debt/Equity stands at 3.26, free cash flow is negative at -₹4,631 Cr, and the Altman Z-Score of 1.45 is in the warning zone. EV/EBITDA at 787.19 is so high that it offers no comfort. With a dividend yield of only 0.32%, shareholders receive almost no cash reward while waiting for growth to reappear. ROCE of 10.40% does not justify this much leverage for a credit card lender. I do not need to dislike the company, but I must respect its limitations. This is a leveraged, cyclically sensitive lending business being priced like a high-growth stalwart. Unless profit growth resumes and the balance sheet strengthens, I will remain on the sidelines. Price is what you pay; the margin of safety is not there.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer