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Axis Securities
Ujjivan SFB (Buy)
Target: ₹44
CMP: ₹39.75
Ujjivan SFB (UJSFB) is a diversified leading SFB which transitioned from a NBFC (Ujjivan Financial Services Ltd.) in Feb’17. The bank primarily caters to the low and middle-income individuals and businesses in the metro and urban areas that have limited or no access to formal banking and finance channels.
UJSFB’s efforts to de-risk the portfolio and move towards the SME and Affordable housing space and other newly introduced products such as vehicle finance and gold finance from MFI lending offers the bank ample headroom to grow. We expect the book to grow at 23 per cent CAGR over FY20-23 driven by a strong growth of 44 per cent CAGR in non-microfinance segments, albeit on a smaller base.
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