Shares of SBI Cards and Payment Services, on Friday, hit a new high of Rs 1,048.65 after rising 2 per cent intra-day on the BSE, thus surpassing its previous high of Rs 1,040, recorded on January 22, 2021.
Thus far in the calendar year 2021, SBI Cards has outperformed the market by surging 23 per cent, as compared to 8.5 per cent rise in the S&P BSE Sensex. A sharp rally in the share price has seen the market capitalisation (market-cap) of SBI Card inches towards Rs 1-trillion mark.
At 11:18 am, SBI Card’s market-cap stood at Rs 98,000 crore, after hitting a high of Rs 98,350 crore in intra-day trade today, the BSE data shows. The stock is less than 2 per cent away to hit a market-cap of Rs 1-trillion mark.
In the October-December quarter (Q3FY21), SBI Cards had seen a sharp improvement in asset quality. It’s gross non-performing assets (GNPA) were at 1.61 per cent of gross advances as on Q3FY21 as against 2.47 per cent as on Q3FY20. Net non-performing assets (NNPA) were at 0.56 per cent as against 0.83 per cent in the year-ago quarter.
The proforma GNPA was 4.5 per cent vs 7.5 per cent the previous quarter, a 300 basis points (bps) improvement quarter on quarter. The company had higher write offs (Rs 650 crore loans) than in other quarters. Moreover, recoveries also were high, a reflection of the collection effort.
“Taking concrete steps to improve asset quality, SBI Cards and Payment Services has written off loans and improved recoveries. Though, higher operational costs and lower yield have cut into profitability that is expected to be relevant only for this quarter. Credit- card spends rose due to the festival season and even had comparatively a better market share,” analysts at Anand Rathi Share and Stock Brokers said in company update.
Provision sufficiency with limited incremental requirement, controlled delinquencies as the company tightens credit filters further and continued business momentum (shift in portfolios on corporate side, pick-up in POS activities) should gravitate SBI Cards on path of revival in FY22, analysts at Prabhudas Lilladher said in results update.