Ujjivan Small Finance Bank Ltd. share price target

Ujjivan SFB logged a 30% miss on PAT at Rs1.1bn, mainly due to sharp contraction in margin and higher provisions as NPAs surged in the MFI portfolio driven by imposition of MFIN guardrails.

We maintain our BUY recommendation on the stock.

Ujjivan SFB reported 24% PAT miss at Rs2.3bn, mainly due to lower other income and higher provisions, as stress in MFI accelerates.

We maintain our BUY recommendation on the stock.

Ujjivan Small Finance Bank’s (Ujjivan) PAT remained flat ~INR3bn from last seven quarters and the same resulted in RoE falling to 21% from 35% in Q2FY23.

We maintain our BUY recommendation on the stock.

We maintain our BUY recommendation on the stock.

We maintain our BUY recommendation on the stock.

We maintain our BUY recommendation on the stock.

Ujjivan Small Finance Bank (USFB) sustained its industry leading profitability with RoA staying above 3.5% for the fifth consecutive quarter, driven by strong growth momentum, higher efficiencies and controlled credit costs. AUM growth, at 5% QoQ, was supported by 9% QoQ increase in disbursement, in line with the bank’s >25% credit growth target for FY24.

We recommend a BUY rating on the stock with a TP of Rs 64, implying an upside of 11% from CMP.

We firmly believe that Ujjivan Small Finance Bank is on an upward trajectory. Our valuation, based on 2.0x FY25E Adjusted Book Value (ABV), yields a target price of Rs 64/share, implying an attractive 13% upside potential from the current market price (CMP).

We maintain our BUY recommendation on the stock

Ujjivan Small Finance Bank (Ujjivan) continued to lead the SFB space with industry leading profitability. RoA sustained at >3.5% for the fourth consecutive quarter with an average RoE of 30% during the same period. While profitability was boosted by provision write-backs during FY23, it still remained robust despite credit cost normalising to 40bps in Q1FY24 reflecting strong underlying business momentum.

We reiterate our BUY recommendation on the stock, valuing UJSFB at 1.6x Sep'24E ABV to arrive at a target price of Rs 45/share, implying an upside of 22% from the CMP.

Ujjivan Small Finance Bank (Ujjivan) has sustained its improving trajectory in profitability, backed by its revised business strategy post the management change in Sep’21, as reflected in it delivering 3.9% RoA and 30% RoE during Q4FY23.