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Why brokerages bullish on SBI Card

SBI Card is buzzing in trade after the company reported a better-than-expected Q1 earnings despite macro headwinds. Total income of SBI Card during the quarter rose to Rs 2,451 crore as against Rs 2,196 crore in the same period a year ago. Credit Suisse have an ‘outperform’ rating with a target price of Rs 1,200. They expect slippages and credit cost to moderate as growth picks up. They also expect FY22 RoA to improve close to 6 percent.

SBI Card is buzzing in trade after the company reported better-than-expected Q1 earnings despite macro headwinds. The total income of SBI Card during the quarter rose to Rs 2,451 crore as against Rs 2,196 crore in the same period a year ago.
Segment-wise, the interest income declined to Rs 1,153 crore from Rs 1,412 crore in the same quarter a year ago, while income from fees and services rose to Rs 1,099 crore from Rs 668 crore in the first quarter of 2020-21.
Other income doubled to Rs 89 crore from Rs 43 crore in the year-ago period. Most brokerages are bullish on the stock.
Credit Suisse has an ‘outperform’ rating with a target price of Rs 1,200. They expect slippages and credit costs to moderate as growth picks up. They also expect FY22 RoA to improve close to 6 percent.
Morgan Stanley is overweight on the stock with a target price of Rs 1,200. They believe that after recent underperformance and with the fintech theme picking up SBI Card should do well.
JPMorgan is also overweight on the stock with a target price of Rs 1,200. They believe the numbers were quite strong given the headwinds and from here on things should only improve.
Watch the accompanying video of CNBC-TV18’s Nimesh Shah for more details.
-With PTI inputs