Ujjivan Small Finance Bank's rally remains unassailable as stock gains 22% in 6 sessions

economictimes.indiatimes.com:

Ujjivan Small Finance Bank remained unassailable on Tuesday as the stock jumped over 8% to a fresh 52-week high of Rs 52.25 on the NSE. The stock has gained 22% over the past six trading sessions on its strong June quarter earnings. The uptick in prices was supported by strong volumes.

At 10:40 am, more than 3.66 crore shares changed hands on the NSE. On Thursday, July 27, the Bengaluru-based bank had posted a 60% year-on-year (YoY) rise in net profit at Rs 324 for the quarter ended June 30. Its net interest income rose 32% YoY to Rs 793 crore, while the net interest margin was down 40 basis points to 9.2% due to the lagged effect of the deposit rate rise.

Gross non-performing assets stood at 2.4% against 5.9% a year back. Net NPA was at 0.06%. The bank's deposit base rose 45% YoY to Rs 26,660 crore.

The ratio of current and savings account to total deposits rose 27% to 24.6% at the end of the reporting period. Following Ujjivan's earnings, several top brokerages recommended a 'Buy' stance on the counter. While Emkay retained its buy rating on for a target price of Rs 58, HDFC Securities has an 'Add' recommendation for a target of Rs 50.

ICICI Securities was most bullish in terms of targets and pegged it at Rs 60. «Ujjivan Small Finance Bank continued to lead the SFB space with industry-leading profitability. RoA sustained at >3.5% for the fourth consecutive quarter with an average RoE of 30% during the same period.