The revised target implies a downside of around 34% from Thursday’s closing level of ₹647.50.
Bernstein said the revolver-led credit card model is undergoing a structural disruption, with little evidence that the pressure is easing or reversing.
As a pure-play credit card issuer, SBI Cards has borne the brunt of this shift, the brokerage said.
Bernstein continues to see downside risks from a further decline in the revolvers-to-spends ratio, which could keep net interest margins (NIMs) and earnings growth under pressure despite an improvement in credit costs.
The brokerage has consequently cut its earnings-per-share (EPS) estimates and now expects them to be 19% and 28% below consensus estimates for FY28E and FY29E, respectively.
For SBI Cards, the decline in the revolvers-to-spends ratio – from 7% in 2019 to 2.8% in Q1FY27 – has resulted in a sharp reduction in profit generated per unit of spends, Bernstein said.
Importantly, the decline in revolvers has not been offset by growth in EMI loans, as the EMI balances-to-spends ratio has also declined, it added.
While SBI Cards has partly mitigated the impact on earnings through lower operating expenses, Bernstein said this is now beginning to weigh on the fees/non-interest income-to-spends ratio.
SBI Cards and Payment Services shares settled 3.82% higher at ₹647.50 on Thursday. However, the stock remains down around 25% so far in 2026.
