Ujjivan Small Finance Bank Share Price Surges 9% on Strong Q2 Results
Ujjivan Small Finance Bank (USFB) share price surged 9% on October 4, 2023, after the bank reported strong financial results for the quarter ended June 30, 2023.
The bank’s net profit rose 103% year-on-year to Rs 324 crore, while its total income increased 46% to Rs 1,464 crore. The bank’s asset quality also improved, with gross non-performing assets (NPAs) falling to 5.2% from 5.6% a year ago.
Analysts said that USFB’s strong Q2 results were driven by growth in its loan book, healthy margins, and improved asset quality.
“USFB’s Q2 results were very impressive, with strong growth in all key metrics,” said a report by Motilal Oswal Financial Services. “The bank’s loan book grew 30% year-on-year, while its net interest margin (NIM) remained healthy at 8.5%. The bank’s asset quality also improved, with gross NPAs falling to 5.2%. We maintain our buy rating on the stock.”
USFB shares have been on a tear in recent months, rising over 150% in the past year. The stock is currently trading at a price-to-earnings (P/E) ratio of 8.6, which is attractive compared to its peers.
Analysts believe that USFB is well-positioned to benefit from the growth of the Indian economy and the increasing demand for financial services from the underserved segment. The bank has a strong presence in rural and semi-urban areas, which are expected to be the key drivers of growth in the coming years.
