The street expects all banks to significantly grow their Retail book. Within retail the expectation is that yields will improve. That is where Credit Cards play a big role. With the surge in UPI which is essentially a competition to CC, banks are under tremendous pressure to protect and grow their CC. In such a scenario, they will only have higher budgets to meet the objectives going forward.
Coming to the point on permanent damage to Margins. Will it be possible for banks to get a competitor to hit margins of Dreamfolks and negotiate better ? We know that Dreamfolks is getting access to card specific details from banks and any breach can have regulatory implications. So will banks trust this to a new player to save some margin ? Would doubt it.
In fact basis multiple new Airports coming up and Lounges becoming a possibility in many Railway stations, the growth opportunity is significant. The YoY growth of 60% confirms that. As long as the topline keeps growing, I would not be worried.
Disc : Invested with average acquisition price lower than current levels
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