Shares of SBI Cards and Payment Services were in focus today after Morgan Stanley assigned a target of Rs 1,100 to the arm of country’s largest lender State Bank of India. The target price is 36.44% higher than the closing of Rs 806.2 on November 25 2022.
The stock has gained nearly 2% since then. In the current trading session, SBI Cards stock opened higher at Rs 813.10 against the previous close of Rs 812.70 on BSE. It touched an intraday high of Rs 820.95. SBI Cards shares are trading higher than 5-day and 20-day moving averages but lower than 50-day, 100-day and 200-day moving averages.
The stock has lost 12.79 per cent in one year and fallen 11.98 per cent since the beginning of this year. Total 0.17 lakh shares of the firm changed hands amounting to a turnover of Rs 1.38 crore on BSE. Market cap of the firm rose to Rs 77,237 crore.
Morgan Stanley is overweight on the stock and said monthly spending for industry has risen 5.5% MoM/28% YoY. For SBI Cards, it was flat MoM, but rose 22% YoY. The firm has maintained its YTD market share at 18%. However, daily spending data from RBI suggests some slowdown MoM due to a higher base in October, Morgan Stanley said.
In the second quarter of the current fiscal, SBI Cards reported a 52 per cent rise in net profit to Rs 526 crore against a net profit of Rs 345 crore in the year-ago period. Net profit miss was driven by higher costs (due to higher gross card acquisition) & higher stage 1 provisions on higher transactor balances. Total income gained 28 per cent year-on-year (YoY) to Rs 3,453 crore in Q2 as interest income climbed 26.5 per cent, fees and services income rose 29.5 per cent, and other income grew 31 per cent YoY. Impairment losses and bad debts declined 8 per cent YoY to Rs 546 crore, but increased 21 per cent sequentially.