Ujjivan Small Finance Bank
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Ujjivan Small Finance Bank is navigating a leadership transition while maintaining a strong focus on its strategic objectives, particularly the diversification of its loan portfolio towards secured lending, which now exceeds 50% of total assets. Management's commitment to achieving a 25% growth in advances and maintaining net interest margins (NIMs) at 8.5% underscores confidence in future profitability. Despite the recent departure of the MD, the bank's operational stability and asset quality remain intact, with improving metrics in collection efficiency and declining non-performing loans. Vista's financial outlook reflects an expected acceleration in revenue growth and margin improvement, supported by favorable industry dynamics and a robust balance sheet. However, potential headwinds include regulatory challenges and competitive pressures in the affordable housing segment. Over the next 12-24 months, key opportunities lie in expanding the secured loan portfolio and enhancing digital capabilities, while watchpoints include the timely appointment of a permanent CEO and the performance of the unsecured loan segment. Overall, Ujjivan SFB is well-positioned for growth, with a fair valuation and significant upside potential
Why We Like This Stock
- Management's focus on increasing secured loans to over 50% of the portfolio enhances risk-adjusted returns
- Strong growth targets of 25% in advances and stable NIMs at 8.5% indicate confidence in profitability
- Improving asset quality metrics and collection efficiency support a positive outlook for future performance
Things To Watch Out For
- Leadership transition poses uncertainty regarding strategic execution and operational continuity
- Regulatory challenges may constrain flexibility and impact growth initiatives
- Competitive pressures in the affordable housing segment could affect margin stability
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 3,409 | 3,636 | 3,871 | 4,508 | 5,249 |
| Profit Before Tax (Cr.) | 1,703 | 942 | 911 | 1,305 | 1,551 |
| PBT Margin | 50.0% | 25.9% | 23.5% | 28.9% | 29.6% |
| Net Profit (Cr.) | 1,298 | 741 | 693 | 992 | 1,179 |
| Earnings Per Share | 6.7 | 3.8 | 3.6 | 5.1 | 6.1 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| ICICI Securities | ▲ Buy | 90 | 02-Sep-2026 |
| Kotak Securities | ▲ Buy | 85 | 02-Sep-2026 |
| Axis Securities | ▲ Buy | 86 | 01-Sep-2026 |
| HDFC Securities | ► Add | 80 | 28-Jul-2026 |
| Emkay Global | ▲ Buy | 85 | 27-Jul-2026 |
| HSBC | ▲ Buy | 83 | 24-Jul-2026 |
| Moneycontrol | ▲ Overweight | nan | 24-Jul-2026 |
| BOB Capital Markets | ▲ Buy | 72 | 09-May-2026 |
| Elara Capital | ▲ Buy | 74 | 09-May-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, as well as two wheeler loan. 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.