SBI Cards Shares were trading nearly one percent lower in today's session. SBI Cards opened the trading session at Rs 740 and that remains day's high for the stock. The financial services major touched intraday low at Rs 717 and was trading at Rs 730 at the time of publication of this report.

SBI Cards: Navigating Competitive Pressures

Valuation Amid Headwinds
Bernstein has valued SBI Cards at Rs 620 using a P/E multiple of 21x on FY26 EPS. This valuation takes into account challenges such as the rapid adoption of UPI and alternative digital credit platforms, which pose threats to its traditional credit card business.

Upside Opportunities for SBI Cards
Despite challenges, Bernstein identifies several opportunities for SBI Cards to enhance its growth trajectory:

Revolver-to-Spends Ratio Revival: Increased consumer credit utilization could bolster revenues.
RuPay Card Growth: A stronger uptake of RuPay cards can diversify revenue streams.
Regulatory Support: Policies that curb alternate credit growth may indirectly benefit SBI Cards.

Bernstein's lower target for SBI Cards

Credit-Based Payments: The growing share of credit payments on UPI platforms offers better margins compared to debit transactions. RuPay credit card transactions on UPI, for example, have risen significantly, reaching 30% of all credit card transactions by March 2024.

Candlestick Patterns Analysis

On the daily chart, SBI Cards has formed a Doji Candlestick Pattern. This pattern indicates market indecision and is often seen at potential turning points. It suggests that buyers and sellers are evenly matched, and a decisive breakout or breakdown might follow in the coming sessions.

Bullish Signal: If the stock breaks above Rs 740 (today's high), it could signal renewed bullish momentum.
Bearish Signal: A break below Rs 717 (today's low) might indicate further downside potential.
Fibonacci Retracement Levels
Using the 52-week high of Rs 817.40 and the 52-week low of Rs 647.95, the Fibonacci retracement levels are calculated as follows:

Support and Resistance Levels
Key support and resistance levels for SBI Cards based on recent price action and technical analysis:

Support Levels:

Rs 717 (immediate support based on today's low)
Rs 687 (Fibonacci 23.6% level and strong historical support)
Resistance Levels:

Rs 740 (current resistance and today's high)
Rs 751 (Fibonacci 61.8% level)
Rs 778 (Fibonacci 76.4% level and next significant resistance)
Actionable Insights
Short-Term Strategy:

If the stock sustains above Rs 740, consider initiating a short-term buy with a target of Rs 751 and a stop-loss at Rs 717.
A break below Rs 717 might trigger a short-term correction toward Rs 687, offering a potential buying opportunity.
Medium-Term View:

A move above Rs 751 could open the door to Rs 778, aligning with the Fibonacci 76.4% level.
Traders looking for medium-term gains can hold positions above Rs 751 with a trailing stop-loss at Rs 732.