SBI Cards & Payment Services Receives 'Hold' Rating from MarketsMOJO

SBI Cards & Payment Services, a leading finance and non-banking financial company (NBFC) in the large-cap industry, has recently received a 'Hold' rating from MarketsMOJO on October 3, 2024.
The downgrade is based on the company's strong long-term fundamental strength, with an average Return on Equity (ROE) of 19.92% and healthy long-term growth as its operating profit has grown at an annual rate of 15.57%. However, the stock is currently in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend.

One of the reasons for the 'Hold' rating is the high institutional holdings at 25.26%. These investors have better capability and resources to analyze the fundamentals of companies than most retail investors.

In terms of recent performance, SBI Cards & Payment Services reported flat results in June 2024. With an ROE of 19.9, the stock is currently trading at a very expensive valuation with a 5.9 price to book value. It is also trading at a premium compared to its average historical valuations.

Over the past year, the stock has generated a return of -6.00%, while its profits have risen by 8.3%. This has resulted in a PEG ratio of 3.9 for the company, indicating an expensive valuation.

Furthermore, SBI Cards & Payment Services has consistently underperformed against the benchmark over the last 3 years. In addition to the -6.00% return in the last year, the stock has also underperformed BSE 500 in each of the last 3 annual periods.

Overall, while SBI Cards & Payment Services has strong fundamentals and a bullish technical trend, its high valuation and consistent underperformance against the benchmark may warrant a 'Hold' rating for now. Investors are advised to closely monitor the company's performance and future developments before making any investment decisions.