Buy SBI Cards and Payment Services, target price Rs 1,260: Yes Securities

Yes Securities has buy call on SBI Cards and Payment Services with a target price of Rs 1260. The current market price of SBI Cards and Payment Services is Rs 831. Time period given by analyst is a year when SBI Cards and Payment Services Ltd. price can reach defined target.

SBI Cards and Payment Services, incorporated in the year 1998, is a Small Cap company (having a market cap of Rs 77915.48 crore) operating in Financial Services sector.

SBI Cards and Payment Services key Products/Revenue Segments include Interest, Fees & Other Charges, Other Services, Service Charges, Commission and Income From Sale Of Share & Securities for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company has reported a Standalone Total Income of Rs 3016.10 crore, down -3.94% from last quarter; Total Income of Rs 3139.66 crore and up 22.20% from last year. Company has reported net profit after tax of Rs 580.86 Crore in latest quarter.

Investment Rationale
Yes Securities believes that stock price represents overstretched concerns on a) MDR reduction and lack of flexibility to recoup it, b) structural pressure on cost-income/profitability from increased competitive intensity, c) impact on growth from rising scale of the new-age card cos and BNPL. It believes card base/spend growth will remain strong for SBI cards. Being the only listed pure-play credit card issuer with significantly higher profitability than Banks and NBFCs (in good times as well as bad times), SBI Cards would continue to command a premium valuation. It has reiterated BUY rating on stock with 12-month target price of Rs 1,260.