SBI Cards - Spends Momentum Healthy; Margin, Revolve Rate To Undergo Lagged Recovery: Motilal Oswal

Motilal Oswal Report

The total number of outstanding cards for SBI Cards and Payment Services Ltd. crossed 15 million in Oct 2022 with the company adding ~0.34 million cards in Oct-22, driving up its market share.

Cards, which were adversely impacted by the Reserve Bank of India guidelines in Aug and Sep 22, have also stabilised. Industry spends have reached an all-time high of Rs 1.29 trillion. Nov 22 has seen good traction in travel and hospitality spends.

Point of sale spends too have picked up though the mix of online spends continues to remain robust at ~54-55%.

SBI Cards indicated that domestic travel spends has surpassed pre-Covid levels while international travel is yet to recover.

In terms of corporate spends, business-to-business spends have started to pick up with an aim to reach 20-22% of the total spends.

Overall, the under penetration of the Indian credit card industry, coupled with rising consumer discretionary spends, provides significant room for growth over the medium term.

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