SBI Cards Surges on Technical Breakout and Strong Fundamentals

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StockEdge Picks SBI Cards for Momentum Gains after RBI Commentary on Easing Credit Stress

By S JHA

MUMBAI, June 7, 2025 — Shares of SBI Cards and Payment Services Ltd. surged over 5% on Friday to close at ₹991.50, marking a strong breakout above the key resistance level of ₹933. According to StockEdge, the stock’s momentum is being reinforced by strong technical and fundamental indicators, and growing investor conviction.

Gains in SBI Cards came also on the back of the Reserve Bank of India stating yesterday that credit stress is easing. A number of financial stocks such as Bajaj Finance were buzzing in the stock markets after the RBI comments. The RBI also stunned with 50 basis repo Rate cut on Friday.

Breakout with Strength

The breakout comes with a Relative Strength Index (RSI) of 59.89, suggesting the stock still has room to climb before entering the overbought zone. “Delivery volume — a key sign of long-term investor interest — has remained consistently above 50% for the past four weeks, peaking at 81.9% in early May,” added StockEdge in a thread posted on X.

Momentum Indicators Bullish

StockEdge highlighted bullish momentum scores for SBI Cards:

🟢 1 Month: 75/100
🟢 3 Months: 70/100
🟢 6 Months: 90/100

This reinforces the view that the uptrend is not only intact but also technically healthy.

Q4 FY25 Financial Performance

The company’s Q4 FY25 results present a mixed picture:

Revenue: ₹4,674 crore (▲7.5% YoY)
Net Profit: ₹534 crore (▼19.4% YoY)
Net Interest Margin (NIM): 11.2% (highest in recent quarters)
Return on Assets (ROA): 3.4%
Cost-to-Income Ratio: 51.4%

“Despite the drop in profits, operational metrics remain strong,” added StockEdge. SBI Cards was listed in the stock markets a few years ago, and since then the stock has almost been in a consolidation phase.

Business Metrics Point to Growth

Total cards in force: 2.08 crore (▲10% YoY)
New accounts added in Q4: 11.09 lakh
Card spends: ₹88,365 crore in Q4 (▲11% YoY)
Retail spends: ▲15% YoY
Online spends: now make up ~59% of total

“The Transactor segment — users who repay full dues and don’t revolve credit — rose to 41%, suggesting a healthier customer base,” added StockEdge.

Asset Quality Stable, Recoveries Improving

Gross NPA: 3.08%
Net NPA: 1.46%
Stage-3 assets: 3.1%, stable
Recoveries: ▲22% YoY

This is supported by the Reserve Bank of India’s recent statement that distress in credit card loans is now easing, offering further comfort to both regulators and investors.

Outlook: Growth with Caution

SBI Cards is targeting:

~11 lakh new cards per quarter in FY26
Receivables growth of 12–14%
Cost-to-Income Ratio to hover around 55–56%
NIMs expected to remain stable

With technical breakout, robust delivery trends, improving recovery rates, and an optimistic business outlook, analysts see SBI Cards well-positioned for long-term growth, especially as macro credit stress indicators begin to ease.

(This article makes no recommendation for buy or sell of shares of any company)

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