Shares Of SBI Cards And Payments Can Give Returns Of 15%

Brokerage firm Geojit has placed a "buy" call on the stock of SBI Cards and Payments and believes the shares can give a return of 15 per cent. The stock is currently trading at Rs 739 and can move higher to Rs 851 according to the brokerage firm. "Net interest income of SBI Cards And Payments grew 52.2% year-on-year in Q1FY21, aided by NIM expansion (+414 basis points, year-on-in) with improved interest yield and lower cost of funds.

However, Non-interest income declined 37.6 per cent year-on-year. The company added 288k new accounts during the quarter. Cards in force inched up 0.5% QoQ to 10,602k, while Spends per card fell to Rs. 72k from Rs. 126k in Q4FY20, impacted by lockdown," Geojit has said in its report. According to the brokerage firm, net profits rose 13.8 per cent, year-on-year, aided by higher income and lower costs. Overall cost to income ratio improved 635 basis points. Year-on-year to 47.2 per cent.

"Growth momentum should pick-up in retail credit activity and daily spends in the coming months. Given current upside potential, we rate a BUY on the stock with a target price of Rs. 851 based on 10x FY22E BVP," Geojit has stated.

The shares of SBI Cards and Payments were last seen trading at Rs 739 on the NSE.