NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
Ujjivan Small Finance Bank Ltd. hosted its Analyst Meet and cut its loan growth and credit cost guidance, primarily from the emerging headwinds in select pockets of its core MFI business (70% of loan book).
The bank continues to look to diversify its loan book by increasing its secured mix, largely through affordable housing and scale-up of new business such as two-wheeler, micro-loan against property, and gold loans. Ujjivan SFB revised its FY25 loan growth guidance to 20% (from earlier range of 20-25%), and its credit cost estimates upwards to ~1.7% (from earlier guidance of ~1.4%).
Ujjivan SFB is likely to continue investing in people and technology to improve its customer franchise and distribution footprint. The bank is looking to apply for a universal bank license, supported by continued diversification of the asset book and more granular retail liabilities.
We cut our FY25/26 estimates by 7-8%, factoring in higher credit costs for FY25/26 given the stress building up in the MFI book; however, we believe that Ujjivan SFB is more conservative than its peers on underwriting, and impairment recognition norms. We reiterate Buy with a revised target price of Rs 65 (1.5 times Mar-26 adjusted book value per share).
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
