Buy Ujjivan Financial Services; target of Rs 520: Geojit BNP Paribas
Geojit BNP Paribas’ research report on Ujjivan Financial Services
Loan book has grown at a strong CAGR of 65% over FY13-16. Ujjivan offers microfinance (86% of loan book) to self-help groups and individual loans for Agriculture & animal husbandry finance and housing finance. Branch expansion and aggressive client acquisition has been the strategy so far.
Ujjivan is currently trading at one year forward Adj. P/B of 2.7x. We believe this premium valuation will sustain, given the possibility of high growth led by SFB. We value at 2.8x FY19E Adj. BV and recommend Buy with a target price of Rs 520.
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