SBI Cards trades higher for second straight day, nears record high

The stock was trading higher for the second straight day, up 3 per cent at Rs 738, on the BSE on Friday. It has surged 7 per cent in the last two days on the back of heavy volumes

Shares of SBI Cards and Payment Services were trading higher for the second straight day, up 3 per cent at Rs 738, on the BSE on Friday. The stock has surged 7 per cent in the last two days on the back of heavy volumes. It was trading close to its all-time high level of Rs 769 touched on March 18, 2020.

The stock hit a four-month high today, on the back of a 27 per cent in the past one month. In comparison, the S&P BSE Sensex was up 9 per cent during the period. A combined 1.4 million equity shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.

On Thursday, the company appointed Ashwini Tewari as the managing director and chief executive officer of the company with effect from August 1, 2020 for a period of two years.

"The company, at its Board meeting held on July 15, approved Resignation of Hardayal Prasad, Managing Director & CEO (nominated by State Bank of India), owing to his Voluntary retirement from the State Bank of India. He will also cease to be the MD & CEO of the Company from July 31, 2020," it said in an exchange filing. READ HERE

SBI Cards made its stock market debut on March 16, 2020. The stock hit an all-time low of Rs 495 on May 22, after falling 34 per cent against its issue price of Rs 755 per share.

SBI Cards is the second largest credit card issuer in India. It offers various types of credit cards considering the need of retail clients (viz. Lifestyle Cards, Rewards, Shopping, Travel and Fuel). It also offers corporate cards and is the largest co-brand credit card issuer in India. It also issues card in partnership with smaller or regional banks.

The board of directors of the company is scheduled to meet on Monday, July 20, 2020 to consider the unaudited financial results of the Company for the quarter ended June 30, 2020. The board will also consider raising of funds by way of issuance of non-convertible debentures (NCDs) aggregating to Rs 1,500 crore in one or more tranches over a period of time.

The foreign brokerage firm Macquarie has ‘outperform’ rating on SBI Cards with 12-month target price of Rs 900 per share citing better-than-expected unemployment trends & moratoriums coming down. The brokerage firm’s channel checks and surveys indicate that white collar job losses in India are not as bad as thought. Moratoriums for white-collar salaried retail loans are coming down. Low incremental spends have helped clear card overdues, it said.

“We expect market share gains from cash transactions for credit cards in the current scenario (online spends, contactless payments, new categories). As SBI Cards is the best play on Indian digital payments, discretionary consumption and retail credit penetration,” the brokerage firm said in recent report.