Its total income during the first quarter of the current fiscal rose to Rs 4,046 crore against Rs 3,263 crore a year ago.
Segment-wise, the interest income in the first quarter increased to Rs 1,804 crore from Rs 1,387 crore a year ago, while income from fees and commission rose to Rs 1,898 crore compared to Rs 1,538 crore last year.
The company’s gross non-performing assets rose to 2.41% of gross advances as of June 30, against 2.24% a year ago. Similarly, net non-performing assets increased to 0.89% from 0.78% a year ago.
At 9.56 am, the scrip was trading 2% lower at Rs 840 on BSE. The stock has also declined 11% in the last one year, however, it has surged over 16% in the past six months.
Should you buy, sell or hold SBI Card’s stock? Here’s what analysts say:
Jefferies
Global brokerage firm Jefferies retained its buy rating on SBI Card with a target price of Rs 1,100, which indicates an upside potential of 31% from the current market prices.
“We are positive on the outlook for credit cards and expect SBI Cards to report strong growth in card issued and spending by leveraging its parent SBI’s large customer base, strong open market channel, and co-branded card tie-ups. Profit should grow at 32% CAGR over FY24-26; RoE should expand from
1HFY24 trough of 24%, supporting valuation multiples,” Jefferies said.
Axis Securities
Axis Securities revised its rating on the stock to ‘Hold’ from ‘Buy’ with a target price of Rs 900.
“We expect SBIC to maintain its growth momentum and register a robust growth of 19/28% CAGR over FY23-25E in terms of CIF/Spends, thereby enabling SBIC to largely maintain its market share despite stiff competition from private banks,” Axis Securities said.
“We revise our NII/Earnings estimates downwards by ~2% for FY24E and broadly maintain our FY25E estimates. The stock currently trades at 22x FY25E EPS. We revise our rating to HOLD from BUY,” it said.
ICICI Securities
ICICI Securities maintained its Buy rating on SBI Card with a revised target price of Rs 986 (earlier Rs: 953).
“Considering SBIC’s RoA/RoE of ~5%/23%, valuation remains attractive. We expect total spending CAGR of 9% between FY23-FY25E; FY23 industry spending was Rs 14.3 trillion with SBIC’s market share at 18.2%. We expect a PAT of Rs 24.6/30.9 billion for FY24E/FY25E (earlier Rs 26.6bn/33.5bn), respectively,” it said.
Motilal Oswal
Motilal Oswal reiterated its Buy rating on the stock with a target price of Rs 970.
“Margin was stable QoQ as higher COF was offset by improving yields. Revolver mix was steady at 24%. Spend growth remained healthy, and we expect the traction to continue, which is likely to drive loan growth. We estimate SBICARD to deliver 28% earnings CAGR over FY23–25, leading to an RoA/ RoE of 5.5%/26.4%,” it said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)