In the Indian stock market, fierce selling is being seen for the third consecutive day today. Sensex and Nifty are diving 50. During this time, the condition of almost all the big companies listed in the market is disturbed. SBI cards and payment services limited company shares are also seeing a huge decline today. With this, the stocks are trading at about 6 percent in a single day to Rs 838. Let’s understand the reason behind the decline in it.
After the poor results of the first quarter, brokerage firms reduced the rating of SBI cards, the result of which is clearly visible on its shares today. Morgan Stanley underwent the rating of SBI cards and fixed the new price target of Rs 710. The lapse in the credit cost was described as the main reason behind this. Similarly, Bernstein also laid a target of Rs 690, giving an underpapering rating and said that the growing credit costs remain constant challenges for the company.
HSBC also cut its price target, which reflects changes in market optimal estimates. They point to the potential difficulties faced by the downgrade company to maintain the profit and indicate the market to adjust their expectations about the company’s income and asset quality.
Company result
SBI Cards and Payment Services recorded a net profit of Rs 556 crore for the June quarter, which is 6.4% less than the Rs 594 crore in the same quarter of the previous year. The operating cost increased by 17% to Rs 2,123 crore, while the finance cost increased by 6% to Rs 813 crore, due to the high receiveables. The company’s return matrix also saw weakness, where returns on average asset (ROA) decreased from 4.1% to 3.4% and Return (ROAE) fell from 19.1% to 15.8% on the average equity.