SBI Cards shares have been on an uptrend since hitting a 52-week low in June 2022. In the last one month, the share price of SBI Cards has increased. 775 to 940 at each level, providing more than 20 percent return to its shareholders over the period. SBI Cards’ strong Q1 results announced on Thursday have caught the attention of stock market experts. HDFC Securities has also been transferred by sbi card result And this subsidiary of SBI sees a strong jump in the share price. Brokerage sees SBI Cards share price to go up 1265 each in the long term.
on fundamentals that can further support sbi card share price The rally, HDFC Securities Research Report says, “SBI Cards reported a strong set of numbers, driven largely by an increase in spending (spending up to 7% QoQ per card) and benign credit costs (COVID-related). Net credit cost at 4% as stress is largely overrun), leading to 7%/31% RoA/RoE, CIF (+19% YoY), Unit Expenses (+54%) Moderate in the share of revolving loans (26%) after a steep decline during COVID (38% to 25%) and unit receivables (+14% YoY), driving strong fees (+42% YoY) An increase was observed, indicating portfolio re-leveraging, which in turn is likely to drive NIM inflation (13.2%).”
“As per the management, credit cards on UPI are likely to have a positive impact on the credit card industry and SBI Card (~7% of CIF on RuPay network), though operational guidelines are awaited,” the brokerage said.
SBI Cards delivered a RoA/RoE of 7/31% in Q1FY23 despite muted NII on account of strong traction in unit spend and low credit cost, the brokerage report said. With gradual reappraisal of the portfolio, SBI Cards is poised to deliver a stable ROA of over 6% by FY24 (better quality of earnings).
“While we consider RBI likely to reduce credit card MDR (an overhang on stock), we believe there are levers to offset SBI Cards’ profits in case of adverse regulations,” the brokerage report said. “
On the suggestion of positional stock market investors with regard to SBI Cards shares, HDFC Securities’ report says, “As per the management, credit cards are expected to have a positive rub on UPI over the credit card industry and SBI Cards (~7%). Likely. CIF on RuPay network), however, operational guidelines are awaited. We revise our FY23/FY24 earnings estimates by 1/2% to factor in better-than-expected traction in card spend, partly lower than expected Offset by NIM reflation and maintain BUY with modified target price of 1,265.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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