Ujjivan Small Finance Bank Ltd. share price target

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.

Recommendation: We maintain our BUY recommendation on the stock.

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.

We reiterate our BUY recommendation on the stock

Ujjivan Small Finance Bank’s (Ujjivan) Q3FY23 and 9MFY23 financial performances were an outcome of its successful execution of revised business strategy post the management change in Sep’21. The improved performance is an outcome of the bank’s 100-day action plan implemented in Oct’21 with three key objectives.

We believe current valuations of 1x FY24 ABV offer further upside and we maintain our BUY recommendation with a revised target price of Rs 34/share (1.4x FY24E ABV), implying an upside of 21% from the CMP.