SBI Cards records sharpest intra-day gain in over 4 months, surges 5%

Topics SBI Cards | Buzzing stocks | Markets

Shares of SBI Cards and Payment Services (SBI Cards) recorded their sharpest intra-day gain in over past four months, with the stock ralliying 5.2 per cent to Rs 838.20 on the BSE on Thursday. Earlier, on July 21, 2020, the stock had gained 6.2 per cent in intra-day trade, the exchange data shows.

Today, in an exchange notification, HDFC Bank said, the Reserve Bank of India (RBI) has advised it to temporarily stop all launches of the digital business generating activities planned under its program ‐ Digital 2.0 and other proposed business generating IT applications, and sourcing of new credit card customers.

The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI, the country’s largest private sector lender said. CLICK HERE TO READ FULL DETAILS

SBI Cards is the leading issuer of credit cards in India. The company offers wide range of value-added payment products and services. SBI Cards operates in more than 130 cities in India. The brand has a wide customer base of over 10 million. SBI Card is a technology driven company.

In the past three months, the stock of SBI Cards has underperformed the market by gaining less than 1 per cent after reporting a lower-than-expected July-September quarter (Q2FY21) earnings, due to a rise in provisions as non performing assets (NPAs) spiked. In comparison, the S&P BSE Sensex rallied 15 per cent during the same period.

SBI Cards has been steadily gaining market share with Cards share reaching 18.7 per cent and share of spends rising to 20.5 per cent as of Aug-2020 (vs. 18.5 per cent and 19.9 per cent, respectively in Q1FY21). The company added 688,000 new accounts during the quarter. Also, Cards in force rose to 11,009k in Q2FY21 vs. 10,602k in Q1FY21.

Geojit Financial Services expects growth momentum to pick-up in retail credit activity and daily spends in the coming quarters as market recovers back to normalcy. SBI Cards’ solid foothold, healthy asset quality, brand image and increasing market share should continue to support the Company’s performance, the brokerage firm said in Q2FY21 result update.

Q2FY21 saw cards-in-force growing 3.8 per cent QoQ/16 per cent YoY to 11 million buoyed by daily average new accounts acquisition retreating at 98 per cent of pre-COVID levels. With leadership in new to credit customers for credit cards at 31 per cent market share (20 per cent market share in overall credit card market) and market share uptick in both spends (20.5 per cent vs 18.6 per cent YoY) and cards in force (18.7 vs 18.0 YoY) business prospects for SBI Cards stand intact, said analysts at Prabhudas Lilladher in result update.

At 12:16 pm, SBI Cards was trading at Rs 834.75, up 4.8 per cent on the BSE, as compared to 0.14 per cent gain in the S&P BSE Sensex. A combined 3.4 million equity shares had changed hands on the counter on the NSE and BSE.

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