SBI Cards and Payment Services Ltd jumps more than three times in its net profit 580.8 crore in the quarter ended March 2022 175 crore in the same quarter of the previous financial year.
The Gross NPAs (Non-Performing Assets) and Net NPAs of the Company as on March 31, 2022 are 2.22% and 0.78% respectively, as compared to 4.99% and 1.15% respectively during the same period a year ago.
Analysts at Yes Securities are of the view that SBI Cards share price declines in MDR and lack of flexibility to compensate, structural pressure on cost-earnings/profitability from rising competitive intensity, rising new-age cards cost. The scale represents the effect on growth. , and BNPL.
“We believe that the card base/spending growth for SBI cards will continue to be strong. Being the only listed pure-play credit card issuer with significantly higher profitability than banks and NBFCs (in good times as well as bad times), SBI Cards will continue to have premium valuations,” Yes Securities said.
Brokerage reiterates its buy tag SBI Cards Share With a price target of 12 months 1,260, implying a potential increase of more than 50% from current levels.
“SBI Cards has reported positive surprises in Q4FY22 driven by lower credit cost. However, the receivables mix has also increased marginally. As a business combination, a low revolver with low credit cost is good but less than optimal. As such, improvement in loan book and revolver mix will be the next earnings call after normalization of credit cost,” highlighted brokerage ICICI Securities. The brokerage’s buy rating on SBI Cards shares comes with a target price. 1,060.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.