Shares of Ujjivan Small Finance Bank have rocketed over 80% in the past six months. Analysts at HDFC Securities see the stock going further up on the back of strong financial performance.

The Ujjivan Small Finance Bank Analyst: Krishnan ASV-led analyst team at HDFC Securities upgraded the stock’s rating from “add” to “buy” raising the price target to ₹75 from ₹50. The target indicates an around 44% rally from the stock’s last closing price of ₹52.10.

The Ujjivan Small Finance Bank Thesis: The brokerage firm said that the lender once again clocked an all-time high profit after tax, led by robust loan growth and in-line credit costs. The analysts noted that the bank’s disbursals grew 18% year on year to ₹5,800 crore, led by all-around momentum across microfinance loans, affordable housing and FIG lending.

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The firm said that the micro-small enterprises loan segment revamp has taken longer than anticipated, but the management expects to see a pick-up in the coming two quarters on the back of new Fintech partnerships.

The brokerage also highlighted that the private lender’s gross non performing assets  improved to 2.4%, led by healthy recoveries and write-offs offsetting elevated slippage.

Price Action: Ujjivan Small Finance Bank’s share price was up 0.58% to trade at ₹52.40 in the early hours of trading on Wednesday.

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