SBI Cards trades higher for fifth straight day; stock gains 3%
Shares of SBI Cards and Payment Services were up 3 per cent at Rs 855 on the BSE on Friday, gaining 4 per cent in the past two trading days after the company said it has launched credit cards in partnership with the digital payment platform Paytm.
The stock was trading higher for the fifth straight days and up 7 per cent during the week, as compared to 5 per cent rise in the S&P BSE Sensex.
Available in two variants, Paytm SBI Card and Paytm SBI Card SELECT, the product has been launched on the Visa platform. This launch is in line with SBI Card's endeavour to offer customers tailored products which bring maximum value in line with spending needs and to encourage digital forms of payments for a safe and enhanced customer experience, SBI Card said in a release.
“The credit card industry in India remains largely underpenetrated. Also, given the current scenario where social distancing is a way of life and cashless payments are a safer alternative, there has been a renewed impetus to digital payments from all corners,” said Ashwini Kumar Tewari, MD & CEO, SBI Cards.
Prior to current week, the stock had corrected 13 per cent from its all-time high level of Rs 919, touched on October 10, 2020, as investors dumped the stock on fears of rising bad loans.
However, SBI Cards has been steadily gaining market share with Cards share reaching 18.7 per cent and share of spends rising to 20.5 per cent as of August 2020 (vs. 18.5 per cent and 19.9 per cent, respectively in Q1FY21). Analysts remain positive on the long term structural story and the spends inching toward pre-Covid levels.
“We expect growth momentum to pick-up in retail credit activity and daily spends in the coming quarters as market recovers back to normalcy. SBI Cards’ solid foothold, healthy asset quality, brand image and increasing market share should continue to support the Company’s performance,” analysts at Geojit Financial Services said in result update.