SBI Cards shares fall on Goldman Sachs downgrade, what caused the bearish call?

SBI Cards shares closed 2 percent lower on July 2 after foreign brokerage Goldman Sachs issued a bearish note on the arm of SBI. Shares of the company ended 1.98% lower at Rs 913.85 apiece on Wednesday. SBI Cards shares are trading lower than the 5-day, 10 day, 20-day, 30 day, 50-day but higher than the 100-day, 150 day and 200-day moving averages. 

The stock is up 28.47 per cent in a year and risen 8 per cent in two years. Total 1.25 lakh shares of the firm changed hands amounting to a turnover of Rs 11.35 crore on BSE. Market cap of the firm fell to Rs 86,955 crore. 

Goldman Sachs lowered rating of SBI Cards and Payment Services stock to 'Neutral' from its earlier 'Buy' call. It fixed the target price at Rs 1,006 per share. 

The brokerage said sharp re-rating in the recent months has made the risk-reward profile more balanced in the near term. Credit costs and loan growth are key areas of focus going forward.

The foreign brokerage said the company's strong share price performance led to a re-rating of its valuation multiple. SBI Cards is poised to deliver strong medium-term performance, despite the downgrade.

SBI Cards shares have fallen over 5.63 percent in the past five days. However, the stock has seen a  massive rally recently. The stock rose over 30 percent in six months. It touched a fresh 52-week high of Rs 1,023.05 apiece on June 10, 2025. 

SBI Cards reported a 19% fall in net profit to Rs 534.2 crore for the quarter ended March 31, 2025, from Rs 662.4 crore in the corresponding quarter last year. 

Profit was impacted amid rising credit costs and provisions, signaling the broader challenges in the consumer lending environment.

Revenue from operations rose 7.5% YoY to Rs 4,674 crore compared to Rs 4,347.7 crore in Q4FY24, led by a steady growth in card usage and fee income.

On the asset quality front, the company logged a gross non-performing asset (NPA) ratio of 3.08% as of March 31. 2025. Net NPA ratio stood at 1.46%. The provision coverage ratio (PCR) for the quarter was 53.46%.