Optimism drives SBI Card rally

Turning the corner

- Manish Joshi

Shares of SBI Cards and Payment Services Ltd (SBI Card) hit a new 52-week high of ₹1,027.25 on Tuesday, having rallied nearly 50% so far in the calendar year (CY) 2025. The Street appears upbeat about its business prospects, especially after the Reserve Bank of India (RBI) began its rate-cutting cycle.

As the only listed pure-play credit card issuer, SBI Card is seen as one of the biggest beneficiaries of lower rates. Unlike most non-banking financial companies (NBFCs), which may be pressured to pass on lower borrowing costs to customers, SBI Card—having previously borne high borrowing costs—faces no such pressure with its credit card customers.

Interest rates on outstanding credit card balances are high and relatively inelastic to rate cycles, as they factor in a premium for elevated default risk. SBI Card's loan book is on a fixed-rate structure, while its borrowings are of relatively shorter duration, the management had highlighted in Q4FY25 earnings call.