Stock Market Today: SBI Card share price surged 5 per cent in intra-day trade on Monday, January 6 after global brokerage Nomura and domestic brokerage Nuvama Institutional Equities upgraded the stock to ‘buy’ and raised their target prices.
Nomura has a target price of ₹825 on the stock, signalling an upside scope of 14 per cent as against its previous close of ₹723.10. Meanwhile, Nuvama’s target price of ₹850 suggests a 17.5% upside.
Following the bullish comments from brokerages, SBI Card share price rallied 5.12 per cent to the day’s high of 760.15 on the BSE.
Bullish Brokerage Views
Nomura
According to multiple media reports, Nomura has upgraded SBI Card to ‘buy’ on multiple growth triggers, including easing concerns on asset quality front and growth in net card additions.
The brokerage said it is observing a few major concerns on SBI Cards and Payment Services going away in the near term, especially on the asset quality side. It expects asset quality issues to subside in new few quarters, with credit cost seen falling to 7.5%/7% In FY26/27 from 9% in FY25.
Further, it added that the company saw a rise in net card additions in November 2024, the highest since December 2023. This gains significance amid an increase in credit card debt in the metro regions. The brokerage also expects the company to be one of the biggest beneficiaries of any rate cuts in FY26, as per media reports.
Nuvama
Nuvama upgraded SBI Card to ‘buy’ from ‘reduce’ on improving credit cost outlook. The brokerage pointed out that SBI Card has missed earnings consensus over the last two years due to a persistent rise in credit cost and low visibility of a turnaround.
“We reckon credit cost peaked in Q2FY25, would remain stable in Q3FY25E and shall start improving in Q4FY25E. While credit card delinquencies are rising for other players, we expect SBI Cards’ credit cost trajectory to improve because its weak credit cycle set in earlier than peers, and now it has guardrails for better risk assessment,” the brokerage added.
Potential rate cuts by the RBI over coming quarters shall be an added positive for SBI Cards, said the brokerage while raising the target price for the stock to ₹850 from ₹620.
At 11 am, SBI Card share price was trading 2.5 per cent higher at ₹741.05 apiece on the BSE.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
