Ujjivan SFB trades at low PE due to higher portion of Microfinance lending and losses due to excess provisioning in FY 2022. Investors are also waiting for reverse merger of Ujjivan FSL with bank which shall increase free float to 100% as against 26% at present for the Bank. This shall open gates for DII, FII to increase allocation to Ujjivan SFB thereby driving PE.
Also bank has not been successful in diversifying into MSME,vehicle loans as compared to Equitas. However Mgmt is trying to fix the policies of lending in these segments. Overall the long term growth story of the bank remains intact.
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