Add Ujjivan Small Finance Bank, target price Rs 45: HDFC Securities

HDFC Securities has add call on Ujjivan Small Finance Bank with a target price of Rs 45. The current market price of Ujjivan Small Finance Bank is Rs 29.3.

Ujjivan Small Finance Bank, incorporated in the year 2016, is a banking company (having a market cap of Rs 5687.61 Crore).

Ujjivan Small Finance Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Standalone Total Income of Rs 1220.54 Crore, up 7.08 % from last quarter Total Income of Rs 1139.83 Crore and up 52.82 % from last year same quarter Total Income of Rs 798.68 Crore. The bank has reported net profit after tax of Rs 293.19 Crore in latest quarter.

Investment Rationale
The management remains confident of incremental business traction and has guided robust loan growth, led by renewed focus across segments. With super-normal recoveries from the written off pool largely absorbed and continued elevated spends, the brokerage expects cost-to income and credit costs to normalise hereon. The brokerage tweaks its FY23/24 estimates; maintains ADD on Ujjivan SFB.

Promoter/FII Holdings
Promoters held 73.68 per cent stake in the company as of 31-Dec-2022, while FIIs owned 2.29 per cent, DIIs 8.21 per cent.