Buy Ujjivan Small Finance Bank; target of Rs 38: Emkay Global Financial

Emkay Global Financial is bullish on Ujjivan Small Finance Bank has recommended buy rating on the stock with a target price of Rs 38 in its research report dated May 12, 2023.

Broker Research

May 13, 2023 / 22:59 IST

buy

26 Aug, 2025 12:21

Volume

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Emkay Global Financial's research report on Ujjivan Small Finance Bank

Despite a miss on margins, Ujjivan SFB reported a strong beat on PAT at Rs3.1bn (vs our estimate of Rs2.4bn) in 4Q, mainly on higher other income and provision reversal. Credit growth (net) remained strong at 31% YoY/9% QoQ in 4Q, led by healthy traction in MFI. Bank expects growth to remain robust at 25%, with increasing share of secured loans which, coupled with lower credit cost, should keep RoAs high & healthy. Bank has applied to the NCLT and expects reverse merger with the holdco to be completed by Sep-Dec ’23. We revise our earnings upwards and expect the Bank to clock RoE of 21-24% over FY23-26E.

Outlook

Factoring-in the earning upgrades and higher P/ABV at 1.3x, we revise our TP upwards to Rs38/share (vs Rs33), while upgrading the rating to BUY from Hold. We retain hold on the Ujjivan Fin Services with TP of Rs286.

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