Analysts are impressed by SBI Cards & Payment Services for more reasons than one. While the credit card businesses of other banks are part of parent banks, SBI Cards is a standalone entity and therefore, suits investors who want to bet only on the booming card business. Next reason is the huge growth potential for card business in the country as the number of cards and usage per card is still very low here. Card penetration level in India at present is at 3.8%, despite the exponential growth witnessed during the past five years when the number of cards and card spends went up by 22% and 31% per annum respectively.SBI Cards, the second largest card player in India with a market share of around 19% in outstanding cards and around 20% in overall card spends, is also increasing its market share. The company which was able to double its card base over the past three years and its incremental market share, is now placed at around 23%. SBI Cards is expected to gain further market share in the coming months because of external factors like RBI’s restriction on new credit card issuances by HDFC Bank. HDFC Bank is the market leader in this space with a card base of around 26%.Analysts’ viewsBuy: 11Hold: 2Sell: 0 81603021 81603047Due to higher delinquency rates, asset quality is the most important factor in the credit card business and thankfully, the worst is already behind the cards industry in terms of asset quality since the economy returned to normalcy faster than expected. Asset quality improvements are expected to be better at SBI Cards, because of the additional proactive measures taken by the management like lowering credit limits, blocking cards of moratorium availed customers, etc. Its fee income receipts are also going up now due to increased card activities at its point of sales (POS) terminals. Its current high valuation, which is around 50 times its expected EPS in 2021-22, is also justified because of higher growth rates. Its EPS is expected to recover significantly in 2021-22 after a small dip in 2020-21 and is expected to report a 24% earnings CAGR between 2019-20 and 2021-22. However, investors should be ready for the short term volatility in this counter because some of its big investors, like CA Rover Holdings, are reducing their stakes through large stock market deals.81603062Selection Methodology: We pick up the stock that has shown the maximum increase in “consensus analyst rating” during the past one month. Consensus rating is arrived at by averaging all analyst recommendations after attributing weights to each of them (ie 5 for strong buy, 4 for buy, 3 for hold, 2 for sell and 1 for strong sell) and any improvement in consensus analyst rating indicates that the analysts are getting more bullish on the stock. To make sure that we pick only companies with decent analyst coverage, this search will be restricted to stocks with at least 10 analysts covering it. You can see similar consensus analyst rating changes during the last one week in ETW 50 table.