Ujjivan Small Finance Bank Ltd. share price target

With stress in the MFI segment receding and companies strategically shifting towards secured, high-yield assets such as affordable housing and vehicle loans, both advances and deposit growth are expected to get back on track by year-end, with advances projected to grow at 19% YoY. While credit costs are anticipated to decline, the shift in portfolio mix is likely to compress NIMs in the short term, leading to a temporary impact on return metrics. However, by the end of FY27, ROA is projected to improve to approximately ~2%. We upgrade our rating to Accumulate on the stock with a revised...

We maintain our BUY recommendation on the stock

Diversifying to secured segments; rebalancing unsecured book to relatively high-yield IL from MGL

We maintain our BUY recommendation on the stock

We recommend a BUY on the stock with a target price of Rs 49/share, implying an upside of 11% from the CMP.

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.

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.

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).