Stock of SBI Cards and Payment Services has come into the limelight a day after the Reserve Bank of India (RBI) allowed credit cards to be linked with the unified payments interface (UPI). The move will enable more payments through the popular platform.
Brokerage YES Securities reiterated its target price of Rs 1,260, 60 per cent higher than the previous close of Rs 784.70 on BSE.
"Being the only listed pure-play credit card issuer with significantly higher profitability than Banks and NBFCs (in good times as well as bad times), SBI Cards would continue to command a premium valuation. Reiterate BUY with 12 months price target of Rs 1,260," said the brokerage.
On Wednesday, Reserve Bank of India (RBI) Governor Shaktikanta Das said that credit cards starting with RuPay can now be linked to the united payments interface (UPI). This will be aimed at providing additional convenience to users and enhancing the scope of digital payments, he added. Till now, only debit cards connected to savings bank accounts and current accounts were allowed to link to the UPI platform.
Brokerage Axis Securities said RBI's proposal to link credit card with UPI is a positive for the credit card issuers as it would boost spending given the popularity of UPI as a mode of digital payment. "Similarly, the linking of UPI with credit cards would encourage users to avail the benefits of the credit period extended by credit cards, thereby providing an opportunity to widen the credit card network and increase its acceptance," it said in a note.
Meanwhile, SBI Cards stock ended 1.62 per cent lower at Rs 772 today against the previous close of Rs 784.70 on BSE. It fell to an intraday low of Rs 765.35, down 2.47 per cent on BSE.
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