SBI Cards and Payment Services shares traded deep in negative territory on Friday, the day it entered the futures and options (F&O) segment, along with seven other scrips.

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The drop of nearly eight percent in SBI Cards shares came a day after the payment solutions company reported its financial results for the quarter ended September 30.

In the last few minutes of Thursday's session, SBI Cards posted a year-on-year (YoY) increase of 67.3 percent in net profit to Rs 344.9 crore for the second quarter of the current financial year. SBI Cards’ revenue, however, declined 8.1 percent YoY to Rs 1,173.2 crore.

Even as SBI Cards’ earnings fell 15 percent short of Nomura’s estimates, the brokerage retained a 'buy' rating on the company’s stock. However, it raised the target price for SBI Cards shares to Rs 1,400.

Also Read: November F&O series starts today; key things to know

According to Nomura, the new target price implies 45 times September 2023 earnings per share (EPS). The brokerage said the company's quarterly earnings were largely dented by a small miss on the pre-provision operating profit front and by higher provisions.

"SBI Cards is in a transitory phase, where the operating jaw gets adversely impacted with costs scaling up ahead of the revenue scale-up, which will take a couple of quarters to come back," Nomura said.

Meanwhile, Dalal Street began a new monthly derivatives series with eight new stocks in the futures and options (F&O) segment on Friday. Along with SBI Cards, all other new entrants — Atul, Birlasoft, Chambal Fertilisers, Firstsource Solutions, Gujarat State Petronet, Laurus, and Whirlpool of India—were in the red amid a highly volatile session.

Also Read: SBI Cards, Birlasoft, Firstsource, 5 other new stocks in F&O fall up to 4%

At 2:07 pm, the shares of SBI Cards were trading 6.88 percent lower at Rs 1047.20 on the BSE whereas the stock was down 7.03 percent at Rs 1,046.75 on NSE.

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