SBI Card Shares Decline As Credit Card Growth Lags Industry
The company's total credit cards in force have risen by 12% year-on-year, which is significantly lower than the industry's growth rate of 18%.
![<div class="paragraphs"><p>(Source: SBI Card official website)</p></div>](https://media.assettype.com/bloombergquint%2F2024-04%2F6ff5f3c0-86a7-4ed7-acb1-4472ee05a598%2Fsbi_card.jpg?rect=0%2C50%2C2738%2C1540&auto=format%2Ccompress&w=200)
Shares of SBI Cards & Payment Services Ltd. fell after a two-day rally as its credit card market share declined in May.
According to Morgan Stanley, the company's market share fell 102 basis points year-on-year to 18.5%. Its total credit cards in force have risen by 12% year-on-year, which is significantly lower than the industry's growth rate of 18%, the brokerage said.
The momentum in SBI Card's year-on-year growth for June 2024 was lower compared to May 2024's average, indicating a slowdown in the company's expansion efforts, the Reserve Bank of India noted in a notification.
While the volume of transactions at SBI Card rose 25% year-on-year in May 2024, it lagged behind the industry's more robust 32% year-on-year rise.
A potential rise in credit costs, a continuous increase in interest rates, a significant slowdown in asset growth due to quality concerns, and investors' bearish sentiment are some of the risks, according to Morgan Stanley.
![SBI Card Shares Decline As Credit Card Growth Lags Industry](https://media.assettype.com/bloombergquint%2F2024-06%2Fde76a763-2a14-48e6-a796-88df70e8c6bb%2FSBICARD.png?auto=format%2Ccompress)
Shares of the company fell as much as 0.85%, before paring loss to trade 0.39% lower at Rs 729.30 apiece as of 10:11 a.m. This compares to a 0.07% decline in the NSE Nifty 50.
The stock has fallen 3.99% year-to-date and 13.92% in the last 12 months, according to NSE data. Total traded volume so far in the day stood at 0.10 times its 30-day average. The relative strength index was at 57.61.
Out of 29 analysts tracking the company, eight maintain a 'buy' rating, eight recommend a 'hold' and 13 suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 3.9%.