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This article is more than 1 year old.

SBI Cards surge over 5% to hit 52-week high on strong June-quarter results

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SBI Cards stock price surged over 5 percent on Tuesday to hit a 52-week high after the company reported robust results for the June quarter.

SBI Cards surge over 5% to hit 52-week high on strong June-quarter results
SBI Cards stock price surged over 5 percent on Tuesday to hit a 52-week high after the country's second-largest credit card company reported robust results for the June quarter. The SBI subsidiary reported a 14 percent rise in net profit as well as a 20 percent increase in credit cards during the quarter amid the coronavirus-induced lockdown.
The stock rose as much as 5.6 percent to Rs 794.50 on BSE. Listed in March, the stock jumped over 20 percent in just the last 1 month. The growth in profit was driven primarily by an increase in interest income and lower tax.
The SBI subsidiary's net profit came in at Rs 393 crore in the April-June quarter compared to Rs 364 crore in the corresponding period last year. The interest income also rose 34.6 percent to Rs 1,412 crore for Q1 from Rs 1,049 crore for Q1 FY20.
It's asset quality also showed improvement with the gross NPAs falling from 2.6 percent to 1.3 percent YoY. The second-largest credit card issuer also reported that loans under moratorium have reduced 88 percent on an MoM basis.
Brokerage house Prabhudas Lilladher raised the target price of the stock to Rs 974 from Rs 782 post the earnings.
All-round performance and incredibly lower moratorium value sum up Q1FY21 performance for SBI Cards, it said, adding that company's focus on non-discretionary and digital spending translated into healthy loans and average daily spend defying lockdown challenges. It sees the company is geared to return to normalcy sooner than expected.
Earlier in the month, global brokerage firm Macquarie said it was naming SBI Cards, the country’s second-largest credit-cards player, as its top pick now that it has a better view on the impact of COVID-19, and said the stock could climb about 27 percent from current levels.
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