Ujjivan Small Finance Bank
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Ujjivan Small Finance Bank is poised for robust growth, driven by management's strategic focus on expanding its secured lending portfolio, which is expected to enhance risk-adjusted returns and support a target of 25% credit growth for FY27. The bank's recent performance has led to an upward revision in return on assets (RoA) guidance to 1.8-2%, bolstered by lower credit costs and operational leverage. However, competitive pressures in the affordable housing segment and potential asset quality concerns remain watchpoints. The improving macroeconomic environment in India, characterized by stable inflation and favorable liquidity conditions, further supports Ujjivan's growth trajectory. Over the next 12-24 months, key opportunities include the expansion of gold loans and vehicle finance, while challenges may arise from regulatory hurdles and execution risks associated with new product scalability. Overall, Ujjivan's strategic initiatives and favorable market conditions position it well for sustained profitability and valuation upside, with a target price of approximately INR 91.46 for the next 12 months
Why We Like This Stock
- Management's focus on increasing secured loans to 56% of the portfolio is expected to enhance profitability and reduce credit costs
- The bank's upward revision of RoA guidance to 1.8-2% reflects strong operational leverage and improving asset quality
- Favorable macroeconomic conditions in India, including stable inflation and strong liquidity, support the bank's growth outlook
Things To Watch Out For
- Competitive pressures in the affordable housing segment may impact margin stability and growth potential
- Regulatory challenges, particularly related to the bank's application for a universal banking license, pose risks to future expansion
- Execution risks associated with scaling new products and maintaining asset quality in specific geographies could affect performance
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 3,409 | 3,636 | 3,871 | 4,528 | 5,439 |
| Profit Before Tax (Cr.) | 1,703 | 942 | 911 | 1,459 | 1,665 |
| PBT Margin | 50.0% | 25.9% | 2353.4% | 32.2% | 30.6% |
| Net Profit (Cr.) | 1,298 | 741 | 693 | 1,109 | 1,265 |
| Earnings Per Share | 6.7 | 3.8 | 3.6 | 5.7 | 6.5 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Axis Securities | ▲ Buy | 86 | 23-Jul-2026 |
| BOB Capital Markets | ▲ Buy | 72 | 09-May-2026 |
| Elara Capital | ▲ Buy | 74 | 09-May-2026 |
| Emkay Global | ▲ Buy | 85 | 27-Jul-2026 |
| HDFC Securities | ► Add | 80 | 28-Jul-2026 |
| HSBC | ▲ Buy | 83 | 24-Jul-2026 |
| ICICI Securities | ▲ Buy | 90 | 24-Jul-2026 |
| Kotak Securities | ▲ Buy | 72 | 02-Apr-2026 |
| Moneycontrol | ▲ Overweight | nan | 24-Jul-2026 |
Company Overview
Show Company Profile
Ujjivan Small Finance Bank Limited provides various banking and financial services in India. The company operates through Treasury, Retail Banking, and Corporate/Wholesale Banking segments. It provides current, savings, salary, TACS savings and current, and NRI accounts; and fixed, recurring, TASC fixed, NRI and NRO fixed, and tax saver fixed deposits. The company's loan products include home and micro mortgages, including home purchase and home construction, composite home, home improvement, and home equity loans; micro mortgages, business loan, and loan against property; vehicle loans, such as two-wheeler loan, electric three-wheeler loan, and dealer trade advance; micro loans, including group and individual loans; agricultural loans; micro, small, and medium enterprises loans and overdrafts; and gold and staff loans. In addition, it provides mobile, personal net, SMS and missed call, phone, video, and WhatsApp banking; ATMs and cash deposit machines; statements services; life, health, and general insurances; credit and debit cards; and safe deposit lockers. Additionally, the company is involved in retail forex and trade services. Ujjivan Small Finance Bank Limited was incorporated in 2016 and is headquartered in Bengaluru, India.