SBI Cards shares rallied in early trade on Tuesday, June 24, after the financial services firm reported strong growth in its spend market share for the month on May.
SBI Card's spend market share rose to 17.1 percent from 16 percent in April. Monthly spending grew 10.1 percent for the company, outperforming the industry’s 3 percent growth. On a yearly basis, SBI Card’s spending was up 23 percent, ahead of the industry’s 15 percent rise.
At 10.05 a.m., shares of SBI Cards and Payment Services were quoting Rs 976.9, higher by 2.2 percent on the NSE.
Further, for the month of May, SBI Cards reported an increase of 5.5 percent in daily spends, as against 4.8 percent rise in April. Corporate spending appears to be rebounding following last year’s regulatory headwinds. SBI Card’s credit card market share stood at 19 percent in May, up 50 basis points from the previous year but flat on a monthly basis.
Further, its cards-in-force rose 10 percent year-on-year, outpacing the industry’s 8 percent growth, although monthly growth in card additions was slightly lower at 0.6 percent versus the industry’s 0.7 percent.
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International brokerage Jefferies maintained a 'Hold' rating on SBI Cards, while Morgan Stanley also retained its 'equal-weight' call, with a price target of Rs 775 per share.
Jefferies also noted that overall card volume growth in the consumer finance segment remained steady at 7.5 percent year-on-year. SBI Card saw a stronger growth rate of 10 percent, when compared to peers, although Jefferies was cautious about SBI Card's pace of new customer additions.
Among private banks, Axis Bank credit cards gained market share in monthly spending, while HDFC Bank and ICICI Bank lost ground.
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