SBI Card has surged 40% as lockdown blues blow over — but those who got shares in the IPO are still in the red
BSE / Business Insider India / Flourish
- After hitting a 52-week low of ₹495 in May, the SBI Card share price has surged by 40%, inching closer to its issue price of ₹755.
- In the six trading sessions in July, the SBI Card stock jumped by 10%, crossing the ₹700 mark for the first time after March.
- Analysts are bullish on the stock, expecting it to cross ₹900 in the next one year.
It may not be too late, though, since analysts are still looking at a target price of ₹900 in the next one year.
TOP VIDEOS FOR YOU
|Brokerage firm||Target price||Upside|
Note: Upside as compared to the closing price of ₹697 as on July 8, 2020.
Why are analysts upbeat about SBI Card?
The reason why SBI Cards lost sheen right after the IPO was the fear that the COVID-19 lockdown will lead to too many defaults. However, as per data available now, the damage has been limited.
MSME EXCHANGE 2021Join us in amplifying the voice of over 60 million MSMEs in IndiaJune 28 - 29, 05:00 PM onwards
|Period||Repayments by customers availing moratorium|
Source: Axis Capital
On the corporate side, only 2 companies have availed moratorium.
According to the Axis Capital report, there are multiple tailwinds for SBI Card’s growth, with the primary one being the fact that the Indian credit card market is underpenetrated. According to a Bank of America Securities report, India has the lowest credit card penetration in the world at just 3%.
This presents credit card companies with immense potential, both in terms of market share as well as revenue, as credit card spends in India are expected to cross ₹15 lakh crore ($200 billion) in the next five years.
“We raise FY21/22 earnings per share [forecast] by 16%/9% respectively. Thus, we raise our target price by 18% to ₹900,” brokerage firm Macquarie said in a report.
SBI Card profit gets squeezed by bad loans, impairment charge, and a big provision for COVID-19
Here's why SBI Cards share price may jump 30% in the next one year, according to Bank of America-Merrill Lynch
SBI Cards lists on the worst possible day and its stock slips 13% on debut
- Cannes Lions 2021: On Day 3, Dentsu Webchutney brings home 2 Silver Lions
- Best laptop for students in India in 2021
- Twitter rolls out new update for iOS allowing users to share tweets to Instagram stories
- If you are vaccinated, IndiGo Airlines is giving discounts on airfares
- Microsoft joins Apple in $2 Trillion Club