Is Ujjivan Small Finance Bank , the stock to buy now?
Ujjivan Small Finance Bank, a leading player in the banking sector, witnessed a rollercoaster ride in its share price in the past few days. After experiencing a remarkable surge of 15% in the share price over the last two days, the bank faced a setback today with a decline of 7%.
However, amidst this short-term dip, the bank’s performance remains robust, as indicated by its impressive financial results for the June 2023 quarter. Let’s delve deeper into the factors influencing the bank’s recent share price movement and the key highlights from its financial performance.
Over the past two days, Ujjivan Small Finance Bank’s share price witnessed an incredible rise of 15%, fueled by positive market sentiment and investor optimism. However, it is not uncommon for such significant gains to be followed by a correction as profit-taking and market fluctuations often come into play. Today’s 7% decline is a reflection of this corrective phase, but it doesn’t overshadow the bank’s overall strong performance.
Despite today’s share price correction, Ujjivan Small Finance Bank has been demonstrating impressive growth. The bank reported a substantial 60% year-on-year (YoY) rise in net profit, reaching a commendable figure of Rs 324 crores for the quarter ending June 2023. This robust financial performance indicates the bank’s effective management and sound business strategies.
Decrease in Non-Performing Assets (NPA)
One of the most significant achievements for Ujjivan Small Finance Bank is the reduction in Non-Performing Assets (NPAs). The bank has been successful in proactively managing its loan portfolio, leading to a substantial decline in NPAs. As of June 2023, the gross NPA ratio has declined to an impressive 0.06%, showcasing the bank’s commitment to maintaining asset quality and risk management.
Growth in Profit After Tax (PAT) Margins
Another positive aspect of the bank’s financial performance is the increase in Profit After Tax (PAT) margins. Ujjivan Small Finance Bank has efficiently managed its expenses and operational costs, leading to higher margins and enhanced profitability. This trend indicates a sustainable business model and prudent financial decision-making.
Rising Customer Base
Ujjivan Small Finance Bank’s customer base has witnessed a steady and notable rise. The bank’s customer-centric approach and a range of innovative products and services have attracted more customers, leading to increased deposits and lending opportunities. This growing customer base not only strengthens the bank’s market position but also creates potential for long-term profitability.
Buy Sell Hold
Today’s 7% dip in Ujjivan Small Finance Bank’s share price might be a short-term setback, but it should not overshadow the bank’s stellar financial performance and achievements. The remarkable 60% YoY rise in net profit, decrease in NPAs, impressive PAT margins, and rising customer base all contribute to the bank’s positive outlook and long-term growth prospects. Investors and stakeholders should recognize the bank’s sound fundamentals and strategic approach, making Ujjivan Small Finance Bank an attractive investment opportunity in the banking sector.
According to analysts, Ujjivan Small Finance Bank has posted highest ever results and is trading at 52 week high. New investors should avoid entering this stock as it may not give them huge profits. Those who have invested in this stock at lower levels can book profit but we still believe that it will touch its lifetime high mark of 62.
Read More : IEX Share Price Target
Use the link to open a Demat account in Zerodha.
Disclaimer- All investments and trading in the stock market involve risk. Any decision to place a trade in the financial markets, including trading in stock should only be made after thorough research. Trading strategies or related information mentioned in the article is for informational purposes only. Use your due diligence before investing. These are just predictions. They may or may not be true. We are not SEBI-registered research analysts.
