SBI Cards hits 12-week high on heavy volumes, zooms 28% in a month

Shares of SBI Cards and Payment Services rose 6 per cent on Monday to hit 12-week high of Rs 655, on the BSE on the back of heavy volumes.
The stock was trading at its highest level since March 30, 2020. In the past month, it has rallied 28 per cent, as compared to 14 per cent rise in the S&P BSE Sensex. The trading volumes on the counter nearly doubled with a combined 3.56 million shares changing hands on the NSE and BSE till 12:41 pm.

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.
SBI Cards made its stock market debut on March 16, 2020. The stock hit an all-time low of Rs 495 on May 22, had fallen 34 per cent against its issue price of Rs 755 per share. It touched a high of Rs 769 on the BSE in intra-day trade on the BSE.
For the January-March quarter (Q4FY20), the company had reported a 71 per cent year-on-year decline in pre-tax profit to Rs 112 crore in March 2020 quarter (Q4), due to additional bad loan provisioning of Rs 489 crore factoring in Covid-related disruption. Had it not been for Covid-19 impact, the company would have reported a sharp 80 per cent year-on-year jump in its pre-tax profit to Rs 692 core.
SBI Cards' May-month business update threw a few positive surprises. Amidst lockdown challenges, around 27,000 new card additions in April 2020, increase in new card additions per day to 2,500 in May’20 from 1,000 in Apr’20, spends per day at Rs 2000 million in last 7 days of May’20 (Rs 2900 mn in Q4), online spends share up to 55 per cent in May’20 (44 per cent in Q4) and moratorium customers stood steady at 12 per cent between Apr-May’20.
Analysts at Prabhudas Lilladher reckon that the May’20-month business stands largely driven by pent-up demand and the same should moderate in H1FY21 on account of macro headwinds (job layoffs, salary cuts). To combat such challenges, company has been focusing on new spend categories (education, online health & pharmacies) and utility spends (D&G, fuel, electronic, wellness).
“Moreover, continued interest income and repayments from moratorium customers (24 per cent at Apr-end) could act as cushions. We expect moderation in per card spends (0.5-1 per cent vs 6 per cent pre-COVID era) and card additions (2 per cent in H1FY21 vs avg 27 per cent pre-COVID era) in H1FY21. While near term challenges stand imminent, sufficient capital, liquidity buffers and robust risk management would support balance sheet resilience,” the brokerage firm said in company update.

SBI Cards and Payment Services slips 9%, hits new low since listing

Shares of SBI Cards and Payment Services slipped 9 per cent to Rs 495 on the BSE on Friday after the Reserve Bank of India (RBI) today announced an extension of the moratorium on loan EMIs by three months. The RBI commentary indicates that the stress in the economy on both demand and supply is likely to continue.
The non-banking finance company's stock was trading at its lowest level since listing on March 16, 2020. It has fallen below its previous low of Rs 501 touched on April 16, 2020. The stock has now fallen 34 per cent against its issue price of Rs 755 per share.

In a new set of measures to trim the impact of coronavirus on the economy, the RBI today decided to cut the policy rate by 40 basis points from 4.4 per cent to 4 per cent. The reverse repo rate has been reduced to 3.35 per cent. It has also extended the moratorium on loan repayments by three more months.
For the working capital facilities, the interest payment has been deferred by another three months, in-line with extension of moratorium on term loans. The accumulated interest for the deferment period can be covered into a funded interest term loan payable be end of the current fiscal. Thus, borrowers need not pay accumulated interest in one shot immediately after the deferment period, which is a big relief for them.
“There is a risk of moral hazard issue creeping in, as borrowers who have the ability to pay, may even opt for moratorium. For MFIs and NBFCs catering to bottom of the pyramid customers, the risk of repayment behavior getting disturbed is higher,” Amar Ambani, Senior President and Head of Research – Institutional Equities, YES Securities said.
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.
SBI Cards reported a 71 per cent year-on-year (YoY) decline in pre-tax profit at Rs 112 crore in March 2020 quarter (Q4), due to additional bad loan provisioning of Rs 489 crore factoring in Covid-related disruption. The management of the company said the current quarter will get impacted because they are not able source new cards, and the collections are also down.
“While lockdown and loss of business have direct bearing on spends (16.7 per cent YoY growth in FY21E vs 27 per cent in FY20) and fees (23 per cent de-growth as against 32 per cent YoY growth in FY20) coupled with NPA spike (4-6 per cent over FY21-22E), we had to prune down FY21 earnings by 48 per cent,” analysts at Prabhudas Lilladher said in a results update.
FY22 should witness return to normalcy attributed to Co.’s SBI association, existing sophisticated technology infrastructure and data analytics. Valuation multiple stands trimmed as it reflects the vulnerability of unsecured nature of business to pandemic shocks, it added.

At 01:51 pm, SBI Cards was trading 5.5 per cent lower at Rs 513 on the BSE, as compared to a 0.89 per cent decline in the S&P BSE Sensex. A combined 3.9 million equity shares changed hands on the counter on the NSE and BSE so far.

SBI Cards slips 13%, hits new low; stock down 32% from issue price

Shares of SBI Cards and Payment Services slipped 13 per cent to Rs 516 on the BSE on Monday amid the buzz of lockdown being extended beyond April 14.
The non-banking finance company's stock was trading at its lowest level since listing on March 16, 2020. With today’s fall, the stock has now fallen 32 per cent below its issue price of Rs 755 per share. SBI Cards saw a weak debut due to prevailing market condition as the uncertainty regarding the effect of the coronavirus epidemic kept investor sentiment in check.
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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.
Axis Capital in January-March quarter (Q4FY20) results preview said that the segments like credit cards, two-wheeler finance, auto/ consumer durable finance (which requires presence at dealerships/ stores) are likely to slow down significantly.
Meanwhile, domestic mutual funds and foreign portfolio investors (FPIs) have increased their stake in SBI Cards post its listing. Total holding of institutional investors rose by 1.78 per centage points to 7.86 per cent as on March 31, 2020. They held 6.08 per cent stake as on March 16, 2020, the shareholding pattern data shows.
Mutual funds holding in SBI Cards increased to 3.04 per cent from 1.6 per cent and of FPIs to 4.07 per cent from 3.53 per cent. Individual shareholders, however, reduced their stake in the company to 5.57 per cent from 7.33 per cent, data shows.
At 11:54 am, SBI Cards was trading 12.5 per cent lower at Rs 520 on the BSE, against 0.66 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped nearly three-fold with a combined 11.5 million shares changing hands on the BSE and NSE so far.