Buy Small Cap Financial Services Stock Amid Bullish Trend For 25% Return: Jefferies

Jefferies has recommended buy call to small cap stock operating in Financial Services sector, SBI Cards and Payment Services Limited with target price of Rs 900 apiece. Last trading price of SBI Cards and Payment Services is Rs 720.10 apiece on BSE. If you buy SBI Cards and Payment Services share now, you can get likely return of 25%. Check details below:

SBI Cards and Payment Services Stock Performance & Return: Last trading price of SBI Cards and Payment Services is Rs 720.10 apiece on BSE with intraday jump of 1.32%. The stock's 52-week high price is Rs 1028.75 apiece and 52-week low price is Rs 656.10 apiece, respectively. Its market capitalisation is Rs 68,126.82 crore. The stock fell 15% in last 1-year, 23% in last 2-years, and gave return of 9% in last 3-years.

Valuation: According to Jefferies, "Net interest margins (NIMs) should bottom out in 1HFY24 and improve over FY24-26e as revolver mix slowly inches up and rates stabilizes, driving healthy profit growth and 23%+ ROE over FY24-26e. The recent underperformance vs NIFTY likely factors in NIM concerns."

The global brokerage stated, "We believe SBI Cards' underperformance (-21%) vs NIFTY (+1%) in the past 6 months already reflects concerns around NIM and fee headwinds. Threat from potential new entrants like BAF and higher spend share gain by UPI are the key risks. Rise in revolver mix and peaking out of rates are key triggers."

SBI Cards and Payment Services About: SBI Card was launched in 1998 by the State Bank of India and GE Capital. Incorporated as SBI Cards and Payment Services Private Limited (SBICPSL), SBI Card is headquartered in Gurgaon, Haryana. The company changed its legal name to SBI Cards and Payments Services Limited in August 2019. In March 2020, SBI Card became the first pure play credit card company to list on the stock exchanges in India. The aim of SBI Card is to offer Indian consumers access to a wide range of world-class, value-added payment products and services, according to its official website.

Disclaimer: The stock has been picked from the brokerage report of Jefferies. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.