Axis Securities, a leading financial services firm, has maintained its recommendation to buy shares of SBI Cards following the company’s second quarter results. The firm has also raised its target price for the stock, citing positive factors that support its decision.
In its research report, Axis Securities highlighted the strong performance of SBI Cards in the second quarter, with a 14% increase in total income and a 12% growth in profit after tax. The company’s total income stood at Rs 2,433 crore, while its profit after tax was at Rs 206 crore.
One of the key factors contributing to this growth was the increase in the number of credit cards issued by SBI Cards. The company added 1.1 million new cards in the second quarter, taking the total number of cards to 11.3 million. This growth in the customer base is a positive sign for the company’s future prospects.
Axis Securities also noted the improvement in asset quality for SBI Cards, with a reduction in gross non-performing assets (NPA) from 4.29% in the first quarter to 4.29% in the second quarter. This is a significant improvement from the same period last year, when the company’s gross NPA stood at 4.86%.
Based on these factors, Axis Securities has raised its target price for SBI Cards from Rs 1,000 to Rs 1,100, maintaining its buy recommendation for the stock. The firm believes that SBI Cards has a strong business model and is well-positioned to capitalize on the growing demand for credit cards in India.
It is worth noting that SBI Cards is a subsidiary of State Bank of India, the country’s largest public sector bank. This provides the company with a strong financial backing and a wide customer base, giving it a competitive edge in the credit card market.
In conclusion, Axis Securities’ research report highlights the positive performance of SBI Cards in the second quarter and its potential for future growth. With a strong business model and support from its parent company, SBI Cards is a promising investment opportunity for investors.
