SBI Cards share price: Buy SBI Cards and Payment Services, target price Rs 1200: Motilal Oswal

SBI Cards share price: Buy SBI Cards and Payment Services, target price Rs 1200: Motilal Oswal

Motilal Oswal has buy call on SBI Cards and Payment Services Ltd. with a target price of Rs 1200. The current market price of SBI Cards and Payment Services Ltd. is Rs 957.0 Time period given by analyst is one year when SBI Cards and Payment Services Ltd. price can reach defined target.SBI Cards and Payment Services Ltd., incorporated in the year 1998, is a Small Cap company (having a market cap of Rs 90048.96 Crore) operating in Financial Services sector.For the quarter ended 30-06-2021, the company reported a Standalone Total Income of Rs 2450.94 Crore, down -.70 % from last quarter Total Income of Rs 2468.14 Crore and up 11.63 % from last year same quarter Total Income of Rs 2195.60 Crore. Company reported net profit after tax of Rs 304.61 Crore in latest quarter.SBICARD reported a steady 1QFY22, amid a challenging environment, supported by lower provisions. Spends have started showing a gradual improvement from Jun’21. The same is likely to rise further, as economic activity picks up and restrictions ease. The gradual decline in the RBI RE book, increase in the Revolver mix, and controlled funding cost would support margin over the medium term. Asset quality saw an improvement over 1QFY22, with the RBI RE book declining to 6% of loans. The brokerage estimates loan book/earnings CAGR of 20%/68% over FY21-23E as a strong PCR (~78%) and management overlay provisions of INR2.58b should help keep credit cost under control. It estimates RoA/RoE to improve to 7.9%/30.5% in FY23E.Promoters held 69.4 per cent stake in the company as of March 31, 2021, while FIIs held 8.6 per cent, DIIs 6 per cent and public and other 16 per cent.

SBI Card raises Rs 500 cr by issuing bonds on private placement basis

Cards and Payment Services ( Card) has raised Rs 500 crore by issuing bonds on a private placement basis.

The stakeholders' relationship and customer experience committee of the company has approved the allotment of 5,000 fixed rate, redeemable non-convertible debentures (NCDs) of face value of Rs 10 lakh each aggregating to Rs 500 crore on private placement basis, Card said in a regulatory filing on Tuesday.

The tenure of the instruments is three years, which are set to mature on August 16, 2024. SBI Card will offer a coupon rate of 5.70 per cent per annum on the bonds.

Shares of the company closed 0.92 per cent down at Rs 1,016 apiece on BSE.

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SBI Card share price grows 5.5% amid improved asset quality in Q1 – check details here

SBI Cards and Payment Services (SBI Card) shares surged 5.5 per cent to Rs 1009.9 per share on the BSE intraday trade on Monday amid improvement in asset quality in the June-ended quarter.

The financial services company’s gross non-performing assets (GNPA) stood at 3.91 per cent in Q1 of FY22 as against 4.99 per cent in the fourth quarter of FY21, while Net NPA was down to 0.88 per cent from a 1.15 per cent quarter-on-quarter basis.

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On a year-on-year basis, GNPA and NNPA stood at 1.35 per cent and 0.43 per cent, respectively, the company said in its exchange filing.

The Reserve Bank of India’s Resolution Plan book was down from 8 per cent to 6 per cent sequentially. The management overlay provision was at Rs 258 crore as of the June-ended quarter of FY22.

The net profit of the SBI Card jumped 74 per cent to Rs 304.61 crore as against Rs 175.42 crore QoQ, while its revenue grew by 2 per cent on a sequential basis and 10 per cent YoY to Rs 2362 crore.

The company’s net interest margin improved 159 basis points (bps) sequentially at 14.8 per cent from 13.2 per cent the previous quarter.

The management said income lines were steady QoQ, NIM improvement sequentially was driven by lower interest expense and higher interest yield. The lower operating expenses were driven by higher business volumes. ROAA and ROAE increase sequentially was driven by higher profits, it further said.

The stock at around 12:40 pm was trading near the day’s high level at 1007.6 per share, up 5.3 per cent on the BSE, as compared to 0.05 per cent growth in the S&P BSE Sensex. The stock is up over 34.5 per cent in the last year and it had touched its all-time high at Rs 1149 on February 02, 2021.

SBI Card is a non-banking financial company that offers an extensive credit card portfolio to individual cardholders and corporate clients which includes lifestyle, rewards, travel and fuel, and banking partnerships cards along with corporate cards covering all major cardholders’ segments in terms of income profile and lifestyle.