India’s ally America has already put its hand forward to help. Bank of America Securites has started coverage of SBI Cards & Payment Services with a ‘buy’ rating, citing strong long-term prospects backed by a diversified model.
The brokerage pegged the target price for the stock of the country’s second-largest credit card issuer at Rs 680, which implies 29% upside from its current market price.
At 11:05 hours (IST) on Wednesday, SBI Cards shares traded 0.43 per cent higher at Rs. 527.85 a share.
“After factoring the near-term impact of Covid-19, we see strong long-term growth supported by SBIC’s diversified model,” BofA Securities said in a note.
The brokerage said its ‘buy’ rating was premised on under-penetration of the credit card industry with SBI Cards being the only listed pure-play credit card company, with the ability to cross-sell to SBI’s vast customer base through Project Shikhar.