HSBC upgrades Ujjivan to ‘hold’; maintains buy call on Equitas

Global investment bank, HSBC, has said that the view of declining risk reward in microfinance space is intact.

Further, it believes that loan book diversification could weigh on its earnings in the near term, analysts at the firm wrote in a research note.

HSBC believe stocks such as Equitas and Ujjivan have continued their focus on bank transition.

On a stock specific basis, HSBC has upgraded Ujjivan to hold from reduce and hiked target price to Rs 370 from Rs 329. This implies an upside of 12 percent.

It said that the current fiscal is a crucial transition year from the perspectives of asset diversification and liabilities base building.

Meanwhile, it has maintained a buy call on Equitas, but cut the target marginally to Rs 152 from Rs 159. It feels that the bank is positioned to accelerate its balance sheet growth from hereon.