Credit CardsJuly 18, 2023 2023-11-20 12:23
Letter no. 125
Valuation of credit card businesses implies that the market believes that (a) current return ratios are sustainable over the longer term, and/or (b) the runway for growth is long given India’s imminent digitisation of the economy. We believe that the markets may be overestimating both.
In today’s moneycontrol article, we write that rising bad loans will likely cap return ratios in the shorter term, and upon implementation of a full India stack, the total addressable market for credit cards may not be as large as perceived by markets.
Read here: https://tinyurl.com/5yuczsy6
Our previous articles can be found here: https://www.buoyantcap.com/our-memos/
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