Goldman Sachs cut its rating on SBI Card to ‘Neutral’ from its previous stance, with a revised price target of ₹1,006 per share. The target implies an 8% upside from Tuesday’s closing price.
The brokerage mentioned that a sharp re-rating in recent months has left the risk-reward profile more balanced in the near term.
It said that credit costs and loan growth will be key areas of focus going forward.
Goldman Sachs pointed out that the company’s strong share price performance has led to a re-rating of its valuation multiple, now more than one standard deviation above its historical average, which in turn has raised several investor concerns. These include –
-The potential for a revival in loan growth, especially since the credit card loan segment remains relatively subdued at 8.5% year-on-year as of May 2025.
-The extent of credit cost improvement during this cycle.
-The conversion rate from consumer spends to interest-bearing loans.
Despite the downgrade, Goldman Sachs said that SBI Card is well-placed to deliver strong medium-term performance.
