Macquarie has announced a significant rating revision for SBI Cards and Payment Services Ltd, downgrading the stock from Neutral to Underperform. The global financial services firm has simultaneously reduced its target price to ₹750.00.

Rating and Target Price Changes

The brokerage firm's latest research note reflects a more cautious stance on the credit card company's prospects. The following table summarizes the key changes:

Investment Outlook

The downgrade to Underperform indicates that Macquarie expects SBI Cards to underperform relative to the broader market or its sector peers. This rating typically suggests that investors may want to consider reducing their exposure to the stock or avoiding new positions.

The revised target price of ₹750.00 provides Macquarie's assessment of the stock's fair value based on their current analysis and market conditions. This price target serves as a benchmark for potential investors and existing shareholders to evaluate their investment decisions.

SBI Cards and Payment Services Limited has received an Environmental, Social, and Governance (ESG) rating of 78 for FY2025 from NSE Sustainability Ratings and Analytics Limited, marking an improvement from the previous year's rating of 77. The rating assessment was conducted based on data pertaining to FY 2024-25 and places the company in the 'Leader' category, representing the top 10% percentile band for exceptional ESG maturity.

ESG Performance Overview

The comprehensive ESG assessment evaluated SBI Cards across three fundamental pillars with varying weightages based on materiality for the financial services sector. The company demonstrated strong performance across all categories:

Environmental Stewardship Excellence

SBI Cards achieved an impressive environmental score of 81, driven by several key performance indicators. The company's greenhouse gas emissions from direct operations and energy consumption remained below industry averages, while its carbon footprint from Scope 3 emissions aligned with standard industry practices. Notably, the energy intensity of operations decreased by 10.00% compared to the previous year, demonstrating improved operational efficiency.

The assessment revealed effective waste management practices, with waste intensity well-managed compared to industry benchmarks. However, areas for improvement were identified in renewable energy consumption and waste recycling and recovery rates, which currently fall short of peer performance levels.

Social Impact and Workforce Management

With a social pillar score of 75, SBI Cards demonstrated balanced performance in stakeholder relationship management. The company maintains permanent employee health insurance coverage at par with industry norms and has achieved a balanced workforce with female employee representation meeting industry standards. The organization reported a lower number of employee and worker grievances compared to sector averages.

Challenges in the social domain include higher-than-average turnover among permanent employees and customer complaint frequency above industry benchmarks, though the latter showed significant improvement with a 48.00% decrease compared to the previous year. The company's domestic procurement rate exceeded industry standards, supporting local economic development.

Governance Framework and Compliance

The governance pillar achieved the highest score of 80, reflecting SBI Cards' robust corporate governance framework. The board composition demonstrates a stronger presence of independent directors than the minimum regulatory requirements, with adequate women representation fulfilling regulatory mandates.

Key governance strengths include:

• Independent director representation in the Nomination and Remuneration Committee exceeding compliance requirements
• Audit Committee composition surpassing statutory guidelines for independent directors
• Risk Management Committee structure meeting regulatory thresholds
• CSR Committee composition exceeding regulatory requirements for independent directors

Core ESG Rating and Methodology

SBI Cards also received a Core ESG Rating of 79 for FY2025, which focuses specifically on third-party assured or audited data from BRSR Core disclosures. This rating comprised an environment score of 73, social score of 71, and governance score of 90, emphasizing transparency and reliability through verified data sources.

The NSE Sustainability rating methodology employs a comprehensive framework incorporating quantitative and qualitative assessments across five criteria: Performance, Compliance, Policy, Initiatives, and Best Practices. The rating scale ranges from 0 to 100, with industry-specific benchmarks ensuring fair comparison within the financial services sector.

Industry Leadership and Future Outlook

SBI Cards' 'Leader' category classification positions the company among the top 10% of assessed entities, demonstrating exceptional ESG maturity with best-in-class practices. This recognition reinforces the company's commitment to sustainable business operations and stakeholder value creation in the competitive financial services landscape.

The improved rating from 77 to 78 reflects the company's continued focus on enhancing ESG performance across all three pillars. The strong governance foundation, combined with environmental stewardship improvements and social responsibility initiatives, establishes SBI Cards as a benchmark for sustainable practices in the payment services industry.