In the dynamic landscape of India’s financial sector, Ujjivan Small Finance Bank Ltd emerges as a formidable player with a resolute commitment to fostering financial inclusion. Starting its journey as Ujjivan Financial Services Limited in 2005, this institution aimed to bridge the gap for the economically active poor, traditionally underserved by mainstream financial entities. Fast-forward to 2023, Ujjivan Small Finance Bank stands as a market-focused powerhouse with a current share price of ₹50.4 and a market cap of ₹9,850 Cr. With a robust dividend yield of 2.48% and impressive ROE of 31.4%, it’s a bank that garners attention. This article delves into the possibilities, examining whether Ujjivan Small Finance Bank can reach the coveted ₹500 INR mark in the coming years, exploring the factors that may influence its trajectory from 2023 to 2030.
ABOUT UJJIVAN SMALL FINANCE BANK
Ujjivan Small Finance Bank, headquartered in Bangalore, India, began its operations on February 1, 2017. It is licensed under Section 22(1) of the Banking Regulation Act, 1949, and received Scheduled Bank status from the Reserve Bank of India in August 2017.
Initially established as an NBFC in 2005 under Ujjivan Financial Services Limited (UFSL), its mission has always been to cater to the financially underserved population. The bank, led by Ittira Davis as MD & CEO, boasts a wide range of financial services, a strong digital presence, and over 16,000 employees, emphasizing financial and digital inclusion as it strives to become a mass-market bank.
Ujjivan Small Finance Bank Q1 FY2024 Results: Summary and Key Points
- Net Profit: Ujjivan Small Finance Bank reported a significant increase in net profit, with a 59.7% rise to ₹324.07 crore in Q1 FY2024 compared to ₹202.94 crore in the same quarter last year.
- Net Interest Income (NII): In the first quarter of FY2024, the bank’s net interest income (NII) increased by 32.1% to ₹792.4 crore, up from ₹599.7 crore in the preceding year, reflecting the growth in the difference between interest earned and interest expended.
- Net Interest Margin (NIM): The NIM for the quarter declined by 40 basis points (bps) to 9.2% from 9.6% year-on-year (YoY).
- Pre-Provision Operating Profit (PPOP): PPOP increased by 52% to ₹457.89 crore in Q1 FY2024 from ₹300.56 crore in the same quarter last year.
- Asset Quality: Regarding asset quality, the ratio of gross non-performing assets (NPA) to gross advances decreased to 2.62% in the current quarter, down from 2.88% in the prior quarter. Nonetheless, there was a slight uptick in the ratio of net NPA to net advances, rising from 0.04% to 0.06% quarter-on-quarter.
UJJIVAN SMALL FINANCE BANK IN RECENT NEWS
- Ujjivan Small Finance Bank shares have surged by 11%, and price targets indicate there’s more potential for growth.
- Emkay Global has increased its earnings projections for Ujjivan Small Finance Bank for FY24-26 by 5-17%. They anticipate that the bank will achieve impressive returns with a return on assets ranging from 2.5% to 3.4% and a return on equity ranging from 22% to 28% over this period.
- Ujjivan Small Finance Bank’s Managing Director and CEO, Ittira Davis, revealed in an exclusive August 2 interview with Moneycontrol that the bank aims for a 25 percent growth in the 2023-24 fiscal year. Additionally, they plan to establish 20 housing finance asset centers across India and intend to seek a universal bank license in the upcoming financial year.
HOW TO BUY UJJIVAN SMALL FINANCE BANK SHARES IN INDIA?
To buy Ujjivan Small Finance Bank shares in India, you can use the services of various brokerage firms. Here are some well-known brokerage companies in India:
- Zerodha
- Upstox
- ICICI Direct
- HDFC Securities
- Kotak Securities
- Sharekhan
- Angel Broking
- 5Paisa
- Motilal Oswal
- Axis Direct
UJJIVAN SMALL FINANCE BANK SHARE PRICE TARGET 2023 TO 2025
Let’s examine the statistics regarding the projected share price target for the period between 2023 and 2025, after conducting a thorough review of the company.
| When | Maximum Price | Minimum Price |
| August 2023 | ₹52.92 | ₹48.11 |
| September 2023 | ₹54.14 | ₹49.22 |
| October 2023 | ₹52.56 | ₹47.78 |
| November 2023 | ₹53.61 | ₹48.74 |
| December 2023 | ₹55.22 | ₹50.20 |
In the coming months of 2023, Ujjivan Small Finance Bank’s share price is poised to exhibit a continuous upward trend, with August’s current price at ₹52.92. As we move into September, it is expected to further rise from ₹54.14, maintaining this ascent. October and November will witness a steady climb, with prices reaching ₹52.56 and ₹53.61, respectively. By December, the bank’s share price is projected to reach ₹55.22, indicating a promising growth trajectory for investors.
| When | Maximum Price | Minimum Price |
| January 2024 | ₹56.35 | ₹49.00 |
| February 2024 | ₹57.50 | ₹50.00 |
| March 2024 | ₹58.08 | ₹50.50 |
| April 2024 | ₹56.39 | ₹49.03 |
| May 2024 | ₹55.28 | ₹48.07 |
| June 2024 | ₹59.15 | ₹51.43 |
| July 2024 | ₹60.92 | ₹52.98 |
| August 2024 | ₹62.14 | ₹54.04 |
| September 2024 | ₹63.39 | ₹55.12 |
| October 2024 | ₹64.42 | ₹56.01 |
| November 2024 | ₹66.99 | ₹58.25 |
| December 2024 | ₹68.33 | ₹59.42 |
Looking ahead to 2024, Ujjivan Small Finance Bank’s share price is anticipated to follow a consistent upward trajectory. Starting the year in January at ₹49.00, it is expected to steadily climb month by month, with December 2024 projected to witness the highest share price at ₹68.33. Conversely, the minimum price for December 2024 is estimated to be ₹59.42, reflecting the bank’s potential for substantial growth over the course of the year.
| When | Maximum Price | Minimum Price |
| January 2025 | ₹69.70 | ₹53.62 |
| February 2025 | ₹73.37 | ₹56.44 |
| March 2025 | ₹74.84 | ₹57.57 |
| April 2025 | ₹74.09 | ₹57.00 |
| May 2025 | ₹72.64 | ₹55.88 |
| June 2025 | ₹74.46 | ₹57.28 |
| July 2025 | ₹75.59 | ₹58.15 |
| August 2025 | ₹78.33 | ₹60.26 |
| September 2025 | ₹79.90 | ₹61.46 |
| October 2025 | ₹81.50 | ₹62.69 |
| November 2025 | ₹79.12 | ₹60.86 |
| December 2025 | ₹80.71 | ₹62.08 |
As we peer into 2025, Ujjivan Small Finance Bank’s shares are anticipated to continue their upward trajectory. Commencing the year with a minimum of ₹53.62 in January, the share price is predicted to steadily climb throughout the year, culminating in December with an estimated maximum price of ₹80.71. Conversely, the minimum price for December 2025 is projected to be ₹62.08, demonstrating the bank’s potential for sustained growth in the upcoming year.
| Year | Maximum Price | Minimum Price |
| 2026 | ₹92.81 | ₹64.97 |
| 2027 | ₹78.89 | ₹55.22 |
| 2028 | ₹102.56 | ₹68.71 |
| 2029 | ₹133.33 | ₹93.33 |
| 2030 | ₹139.99 | ₹97.99 |
Looking ahead to the period from 2026 to 2030, Ujjivan Small Finance Bank’s share prices are expected to show steady growth. The year 2026 is projected to see the shares reach a maximum of ₹92.81 and a minimum of ₹64.97. This trend continues into 2027 and 2028, with anticipated fluctuations between ₹55.22 and ₹102.56, followed by significant growth in 2029 and 2030, where the share prices are expected to range between ₹68.71 to ₹139.99. These projections suggest a promising trajectory for investors over the next five years.
UJJIVAN SMALL FINANCE BANK FINANCIAL CONDITION (LAST 5 YEARS)
| Year | 2019 | 2020 | 2021 | 2022 | 2023 |
| Revenue | 1,832 | 2,704 | 2,806 | 2,813 | 4,165 |
| Interest | 725 | 1,070 | 1,078 | 1,039 | 1,467 |
| Expenses + | 1,053 | 1,417 | 1,944 | 2,557 | 1,730 |
| Financing Profit | 54 | 217 | -215 | -783 | 968 |
| Financing Margin % | 3% | 8% | -8% | -28% | 23% |
| Other Income + | 206 | 322 | 302 | 313 | 589 |
| Depreciation | 61 | 73 | 77 | 80 | 90 |
| Profit before tax | 199 | 466 | 10 | -550 | 1,467 |
| Tax % | 0% | 25% | 19% | 25% | 25% |
| Net Profit + | 199 | 350 | 8 | -415 | 1,100 |
| EPS in Rs | 1.38 | 2.02 | -2.4 | 5.63 | 6.25 |
| Dividend Payout % | 0% | 0% | 0% | 0% | 22% |
Over the past five years, Ujjivan Small Finance Bank has experienced a noteworthy transformation in its financial performance. Starting in 2019, the bank reported a revenue of ₹1,832 Cr, which steadily increased year after year, reaching a substantial ₹4,165 Cr in 2023. While the bank faced challenges in 2022 with a negative financing profit of -₹783 Cr, it made an impressive comeback in 2023, securing a profit of ₹968 Cr.
This revival can be attributed to its robust financing margin, which rebounded from a low of -8% in 2021 to a healthy 23% in 2023. Additionally, the bank’s net profit saw a remarkable turnaround, shifting from a deficit of -₹415 Cr in 2022 to a surplus of ₹1,100 Cr in 2023. With a consistently improving earnings per share (EPS), culminating at ₹6.25, and a dividend payout of 22%, Ujjivan Small Finance Bank appears to have navigated challenges and emerged as a financially resilient institution in the last half-decade.
UJJIVAN SMALL FINANCE BANK SHARE PRICE TARGET BY BROKERAGE FIRMS AND EXPERTS
YES Securities recommends purchasing Ujjivan Small Finance Bank with a target price of Rs 50.(12-June-2023)
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FAQs
Based on the analysis, the share price target for Ujjivan Small Finance Bank in 2025 is anticipated to range from a minimum of ₹62.08 to a maximum of ₹80.71.
Looking ahead to 2030, Ujjivan Small Finance Bank’s share price target is projected to exhibit gradual growth, potentially reaching a maximum of ₹139.99 and a minimum of ₹97.99.
Is it worthwhile to invest in Ujjivan Small Finance Bank for the long term?
Investing in Ujjivan Small Finance Bank for the long term appears to hold promise, as the analysis suggests a consistent upward trend in share prices over the coming years. However, as with any investment, it’s advisable to conduct thorough research and consider various factors before making a decision.
Will the Ujjivan Small Finance Bank stock grow?
Yes, based on the provided analysis, the Ujjivan Small Finance Bank stock is expected to grow steadily in the foreseeable future, with projected increases in both share price targets and potential for sustained growth.
Can Ujjivan Small Finance Bank reach ₹500 INR?
While the analysis does not provide data up to ₹500 INR, it indicates a positive trajectory for the bank’s share prices. Reaching ₹500 INR would likely require continued growth over an extended period, which could be influenced by various economic and market factors. However, it’s crucial to consult with financial experts or conduct further analysis to determine the feasibility of this specific target.
CONCLUSION
In conclusion, the analysis of Ujjivan Small Finance Bank provides valuable insights into its potential trajectory for the years ahead. While the current market conditions indicate an undervalued stock with a low P/E ratio, suggesting an attractive investment opportunity, there are notable concerns to consider. The company’s low interest coverage ratio and a recent trend of relatively low return on equity over the past three years present challenges.
However, the bank has displayed impressive profit growth, with a remarkable 176% CAGR over the last five years, and consistent sales growth. These positive indicators signal the bank’s potential to continue its upward trajectory. Whether Ujjivan Small Finance Bank can reach the ambitious target of ₹500 INR by 2030 remains a subject of debate, as it would require sustained growth and overcoming the challenges highlighted. Therefore, investors should approach this opportunity with careful consideration and a long-term perspective, keeping a watchful eye on both the bank’s performance and the broader economic landscape.
What did we learn?
- 1 ABOUT UJJIVAN SMALL FINANCE BANK
- 2 Ujjivan Small Finance Bank Q1 FY2024 Results: Summary and Key Points
- 3 UJJIVAN SMALL FINANCE BANK IN RECENT NEWS
- 4 HOW TO BUY UJJIVAN SMALL FINANCE BANK SHARES IN INDIA?
- 5 UJJIVAN SMALL FINANCE BANK SHARE PRICE TARGET 2023 TO 2025
- 6 UJJIVAN SMALL FINANCE BANK FINANCIAL CONDITION (LAST 5 YEARS)
- 7 UJJIVAN SMALL FINANCE BANK SHARE PRICE TARGET BY BROKERAGE FIRMS AND EXPERTS
- 8 FAQs
- 8.1 What is the share price target for Ujjivan Small Finance Bank by 2025?
- 8.2 What is the share price target for Ujjivan Small Finance Bank by 2030?
- 8.3 Is it worthwhile to invest in Ujjivan Small Finance Bank for the long term?
- 8.4 Will the Ujjivan Small Finance Bank stock grow?
- 8.5 Can Ujjivan Small Finance Bank reach ₹500 INR?
- 9 CONCLUSION
