Macquarie has maintained its neutral rating on SBI Cards and Payment Services with a target price of ₹990 per share, noting that Q2FY26 earnings were weaker than expected due to higher operating expenses. The brokerage said the profit miss was primarily driven by elevated opex, which offset steady revenue performance.
Macquarie said that while credit costs remain a key monitorable, the firm expects an improvement in net interest margin (NIM) over the coming quarters as the lending mix stabilises. However, it flagged that the stock appears expensive, currently trading at around 4.5x FY27 estimated price-to-book for a return-on-assets (ROA) trajectory of about 3% in the first half of FY26.
The brokerage said it remains cautious on valuation multiples given the high base and moderate earnings growth outlook, even though asset quality trends are stabilising. Macquarie added that while NIM recovery and disciplined credit cost control could support profitability, re-rating potential appears limited.
Disclaimer: The views and recommendations above are those of Macquarie. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
