Ujjivan Small Finance Bank Ltd. share price forecast

We maintain our BUY recommendation with a revised target price of Rs 31/share (1.4x FY24E ABV), implying an upside of 29% from the CMP.

Tanla Platforms: Tanla reported a weak quarter, revenue was down due to seasonality and margin dropped due to client-specific issues and higher competition. The enterprise business gross margin slipped 640bps to 16.4% (vs. our estimate of 100bps decline) due to a pricing cut in one large client, currency impact and higher technology investments. Revenue came in line, down 6.2% QoQ due to softness in the enterprise business (-4.2% QoQ) while the platform segment was stable (-1.0/+22.7% QoQ/YoY). The platform business will continue to deliver strong growth, with the ramp-up of Wisely (VI and Truecaller). We expect the enterprise business to clock ~15% volume growth and the GM will be in the 18-19% range (vs 20-21% earlier) due to increasing competition. The platform business will clock 35% revenue CAGR, with ~90% GM. The management is confident about expanding the EBITDA margin to ~19-20% in the next two quarters. We are building in margin recovery but expect it to be lower than the historical level. We cut our EPS estimate by 10.6/9.1% for FY23/24E led by a ~200bps margin reset. We have a BUY rating with a TP of INR 1,040, based on 22x FY24E EPS (earlier 26x), supported by ~20% revenue CAGR and RoE of >40%. The stock is trading at 18.6/15.4x FY23/24E EPS (~40% lower than 5Y average). Symphony: Symphony's domestic business delivered an in-line performance along with high channel inventory clearing up to negligible levels. Domestic revenue was at INR 1,880mn, 119/+11% YoY/QoQ, up 8% on a three-year CAGR. The domestic sales were in addition...

We upgrade our rating from HOLD to BUY and value UJSFB at 1.2x FY24E ABV to arrive at a target price of Rs 23/share, implying an upside of 43% from CMP.

Ujjivan Small Finance Bank, the wholly owned subsidiary of Ujjivan Financial Services Ltd. (USFL) serves over 62.1 lakh customers through 575 branches and 16,896 employees spread across 248 districts of 24...

The management has indicated that despite the rise in COVID-19 cases, business momentum has not witnessed any major disruption and monthly collections continue to improve in Jan'22 and expects the business momentum to remain strong in Q4FY22E.

Ujjivan Small Finance Bank, the wholly owned subsidiary of Ujjivan Financial Services Ltd. (USFL) serves over 59.7 lakh customers through 575 branches and 16,251 employees spread across 248 districts of 24...

We maintain our HOLD rating given the delay in the ROE normalization, higher restructured pool with concerns of elevated slippages especially from the MFI pool and asset quality concerns (primarily in the MFI book). We introduce FY24E estimates and value UJSFB at 1.4x H1FY24E ABV to arrive at a targ

Ujjivan SFB (Ujjivan) published Aug’21 business update on (September 24, 2021) and the key takeaways include – i) gradually approaching normalcy on most business parameters, ii) increased focus on containing incremental stress, 100- day plan for each vertical with focus on PAR reduction & NPA recovery, and iii) credit cost guidance of Rs11-12bn vs Rs4.7bn in Q1FY22 reflects improving asset quality trend.

Company Update

Ujjivan Small Finance Bank, the wholly owned subsidiary of Ujjivan Financial Services Ltd. (USFL) serves over 58.2 lakh customers through 575 branches and 16,102 employees spread across 248 districts of 24...

We maintain our BUY recommendation and value UJSFB at 1.7x FY23E ABV to arrive at a target price of Rs 32/share, implying an upside of 17% from CMP.

Second wave induced credit costs eroding profitability

We currently have a BUY recommendation on the stock with a target price of Rs 37/share (1.8x FY23E ABV), implying an upside of 17% from CMP.

While COVID 2.0 related headwinds are likely to delay the recovery process, we remain confident in the resilience of the business model. We maintain a BUY on the stock. We value UJSFB at 1.8x FY23E ABV and arrive at a target price of Rs. 37/share, implying an upside of 21% from CMP.

Ujjivan Small Finance Bank, the wholly owned subsidiary of Ujjivan Financial Services Ltd. (USFL) serves over 56.6 lakh customers through 575 branches and 16,733 employees spread across 244 districts of 24 states in India with gross loan book size of Rs.13,638cr. Also, it has about 477 full-service banking outlets with a deposit base of Rs.11,617cr. Pre-Provision profit reported a growth of 42% on a YoY basis due to lower operating expenses and strong fee and other income. Higher credit cost and upfronting of provisions hurt bottom-line as the...

We maintain a BUY on the stock with a target price of Rs. 41. (1.9x FY23E ABV).

Ujjivan SFB (UJSFB) is a diversified leading SFB which transitioned from a NBFC (Ujjivan Financial Services Ltd.) in Feb17. The bank primarily caters to the low and middle-income individuals and businesses in the metro and urban areas that have limited or no access to formal banking

The fast paced diversification from a microfinancier to a small finance bank, the recent ramp up in the liability franchise after a slow start, management's focus on technology driven product expansion and customer sourcing strategy and razor sharp focus on maintaining asset quality cement