Ujjivan SFB – The road to recovery may be long

PRO Only Highlights
–  Quarterly performance largely backed by improved realisations
–  Medium-term triggers China plus and protectionist measures for tyre industry
–  Valuations not inexpensive; but improved medium-term outlook

Many things went wrong for Ujjivan Small Finance Bank (Ujjivan SFB, CMP: Rs 19.75, Market Cap: Rs 3,638 crore) during the pandemic as the company saw a steep surge in bad assets, an exodus of talent, and anaemic growth. While the founder and some of his trusted lieutenants have made a comeback, they have a tall task ahead. The earnings of Q2 FY22 are weak on expected lines but not totally devoid of some positive takeaways. With the economy showing signs…