SBFC Finance stock jumps 19% to hit new record-high on brokerage upgrade

Shares of SBFC Finance surged over 19 percent, reaching a record high of ₹104.35 per share on September 23, following an upgrade by credit ratings agency ICRA, which gave its bank facilities a 'stable' outlook.

The increase is also accompanied by a surge in trading volumes. Approximately 7 crore equity shares were traded in intra-day transactions on both the BSE and NSE, significantly surpassing the one-week average of 37 lakh shares.

In a recent regulatory filing, ICRA upgraded SBFC Finance's long-term fund-based term loan of ₹2,100 crore to 'AA-' with a stable outlook, up from the previous rating of 'A+' with a stable outlook. Additionally, the ratings agency upgraded and withdrew the company's long-term unallocated fund-based bank lines amounting to ₹1,400 crore, assigning the same 'AA-' stable rating, up from 'A+' stable.

An 'AA-' rating from ICRA indicates that the issuer has a very low credit risk and demonstrates strong confidence in its capacity to meet financial obligations promptly.

Analysts view on SBFC Finance stock

Meanwhile, brokerage firm CARE Ratings also upgraded the SBFC Finance stock to 'AA-' with a stable outlook, from 'A+' stable, earlier. CARE Ratings' 'AA-' rating signifies that the issuer carries a very low credit risk and provides a high level of assurance regarding the timely servicing of financial obligations.

In the quarter ending in June, SBFC Finance reported a 68 percent year-on-year increase in net profit, reaching ₹79 crore, compared to ₹47 crore in the same period last year. The company's operational revenue also grew by 30 percent year-on-year (YoY), rising to ₹298 crore in Q1FY25 from ₹229 crore in the corresponding period of the previous year.

SBFC Finance is a non-deposit-taking NBFC that primarily serves entrepreneurs, small business owners, self-employed individuals, and salaried or working-class customers, offering secured MSME loans and loans backed by gold.

Currently, SBFC Finance stock is covered by approximately four brokerages, with three recommending a 'buy' rating and one advising a 'hold.' In the past year, SBFC Finance shares have risen by more than 19 per cent, lagging behind the Nifty 50 index, which gained 31 per cent during the same period.