DESIGNED FOR THE DIGITAL TOMORROW- SBI Cards Annual report 2021 22 analysis

India is a highly under-penetrated market, with average card ownership of 4 in 100 people, very less compared to 132 in Brazil and 71 in Australia. (from SBI Cards Annual report 2021 22)

 

SBI Card is one of the leading banking financial institutions in India. They are the second largest credit card issuer in the country. SBI Card is founded in 1998 and listed on the Indian stock market in March 2020. Mr. Dinesh Khara is the chairman and Mr. Nalin Negi is the chief financial officer of the company. S. Ramanand Aiyar & Co. are the statutory auditors of the company.

In the year 2022, SBI cards reached a total number of customers of 140 lakhs. In recent years the growth in the economy and the government's push for digitization of payments lead the people especially the middle class practicing to adjust their spending on a credit basis. This factor caused 20 million Indian customers to apply for a credit card every month and this credit-based consumer spending system in our society will support the growth of credit providers like SBI Cards. This fact is quoted in the chairman's message to its shareholders implying the future potential of the company.

In FY22, there has been an increase of 3572 new accounts, 33% more than FY21 and SBI cards has launched numerous technologies for feasible operation including a Digital multi carding system (Instant carding for existing customers), lead management portal which bagged MarTech Leadership Award 2021-22 and also expanded their WhatsApp based service.

The total global geopolitical situation and the consequently elevated commodity prices impart considerable uncertainty to the domestic inflation outlook. RBI has already increased the repo rate by 90 bps. This may lead to an increase in the cost of funds. Investing activity will be the only profitable business in this situation.

According to "A review of India's credit Ecosystem" by Experian, the Indian consumer credit market is expanding at a rate higher than most other major economies globally, with more than 20 million Indian consumers applying for a credit card every month.

During the FY 2021-22

• Total income increased by 16.3% to Rs. 11,301.52 crores from Rs. 9713.58 crores in FY21.
• Total PAT increased by 64% to Rs. 1616.14 crores.
• Cash and Cash equivalents balance at the bank at the end of the year 2022 March was 758.48 crore 18% higher than FY21.
• Digital payments in India increased up to 87% compared to 45% in FY15.
• SBI Cards launched 3 new products - 1. Fabindia SBI Card 2. SBI Card Pulse 3. Nature's Basket SBI Card.
• Total income increased by 16% from 9714 crores in FY21 to 11032 crores in FY22.
• The total balance sheet size increased by 28% from 27013 crores as of Mar 31, 2021, to 34648 crores as of March 31, 2022.
• Earnings Per Share increased by 64% to 17.16 in FY22.
• The Board of directors has declared an interim dividend of 25% ( Rs 2.5/equity share).
• The company appropriated 323.23 crores towards the statutory reserves.
• The percentage increase in the median remuneration of employees during the FY is 4.22%.
• No complaints regarding bribery or corruption were reported against the company.
• No related party transactions were made in FY21 that may have potential conflict with the interest of the company.
  
  

As of March 2022, SBI Cards were trading at its 52-week low price of 712.35. In the analysis of the annual report 2021-22 of SBI Cards, the company is performing well and has shown better financial results. The credit card industry in Industry in India is expected to deliver better returns shortly as the credit consumer market is expanding exponentially. 

SBI Cards can be considered a good choice for long term investment in stock market.

 

Conclusion : From the Annual report 2021 22 of SBI Cards the company is heading for a big leap in coming years. The increasing interest of people to make payments by credit basis system will boost the performance of companies providing credit card services. So consider the stock for a long term investment.

 

Click to read the disclaimer. 

 

Reference : SBI Cards Annual Report 2021-22.

 

Related articles : Best mutual funds in Equity- Large and Mid-cap funds.

 

IF YOU ARE CONFIDENT WITH YOUR WRITING AND COMMUNICATION SKILL THEN CONVERT YOUR SKILL TO MONEY. CHECK THE SIDEBAR OF THIS BLOG FOR MORE INFORMATION or CLICK THIS LINK

Amazon ads :The Intelligent Investor Revised Edition. - : The Definitive Book on Value Investing by Benjamin Graham

(Click the link to buy the product)