AMEX vs SBI is again an apple to orange comparison. AMEX has grown at 7% in the last 10 yrs in both revenue and net profit whereas SBI cards grew at 30%. Hence valuations are not comparable.In future also, SBI cards will grow at a much better rate (not 30% but at least 12%) than AMEX.
I guess market in in a shock due to reduced profitability and growth in FY24. Hence a PE of 29.
Even if growth is drastically down from here onwards (unlike last 10 yrs), the sustainability/longevity of this nominal growth is the critical factor that will decide returns from current level.
Question is “Does market overestimate the bad news of FY24?”
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