Finance Term Lending · Founded 2004 · www.ujjivan.com · BSE 539874 · NSE UJJIVAN · ISIN INE334L01012
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Business
Ujjivan Financial Services Ltd. is a non-deposit taking core investment company and the holding company for Ujjivan Small Finance Bank (USFB). Its core business involves providing financial services primarily to the unserved and underserved segments of India's population. Ujjivan Small Finance Bank, its main operating entity, transitioned from a microfinance institution (MFI) to a small finance bank (SFB). The bank offers a range of products including microbanking loans (Joint Liability Group loans, individual loans), affordable housing loans, vehicle finance, gold loans, and secured business loans. It also offers liability products such as savings accounts, current accounts, and fixed deposits. The company makes money primarily through interest income generated from its loan portfolio and fees for various banking services.
Revenue Mix
The primary operating segment is Ujjivan Small Finance Bank. Within its loan portfolio, the key segments typically include:
Microbanking: This remains a significant segment, encompassing JLG (Joint Liability Group) loans and individual micro-loans, catering to its traditional customer base.
Retail Lending: Diversification into other asset classes like affordable housing loans, vehicle finance, gold loans, and secured business loans to MSMEs (Micro, Small, and Medium Enterprises).
While specific revenue percentages fluctuate, Ujjivan has been actively working to diversify its loan book away from an over-reliance on microbanking. Liability products (deposits) are crucial for funding and reducing borrowing costs.
Industry
Ujjivan operates in the highly regulated Indian financial services sector, specifically within the Small Finance Bank (SFB) sub-segment. The industry is characterized by its focus on financial inclusion, catering to segments often overlooked by larger commercial banks. It faces competition from other SFBs (e.g., Equitas, AU, Suryoday), microfinance NBFCs, and increasingly, some large public and private sector banks expanding their reach into these segments. Ujjivan is one of the more established SFBs, having successfully transitioned from a large MFI. Its positioning is built on a deep understanding of its target customer base, an extensive branch network, and a proven ability to underwrite and recover loans from the unbanked and underbanked population.
MOAT
Distribution Network & Reach: Ujjivan possesses an extensive branch network and a large field staff, particularly in semi-urban and rural areas. This physical presence is crucial for reaching its target demographic, building relationships, and managing collections, which is hard for new entrants or digital-only players to replicate quickly.
Underwriting Expertise: Decades of experience as an MFI have provided Ujjivan with deep data and expertise in assessing the creditworthiness of unbanked and informal sector borrowers, a skill set not easily developed by traditional banks.
Customer Relationships: Long-standing relationships and trust built with its microfinance customer base, leading to higher customer retention and cross-selling opportunities for new banking products.
Scale among SFBs: As one of the larger and more mature SFBs, it benefits from a reasonable scale of operations, allowing for better efficiency and investment in technology compared to smaller peers.
Growth Drivers
Financial Inclusion Mandate: The ongoing push for financial inclusion by the Indian government and regulators provides a vast untapped market for Ujjivan's services.
Diversification of Loan Book: Successful expansion into higher-ticket, secured loan products (housing, vehicle, MSME) can drive growth, improve asset quality, and enhance profitability by reducing concentration risk.
Digital Adoption: Leveraging technology for customer onboarding, loan origination, collections, and enhancing customer experience can improve efficiency and reach.
Geographic Expansion: Deepening penetration in existing operational areas and cautious expansion into new, underserved geographies.
Economic Revival: General economic growth in India, particularly in consumption and informal sectors, directly benefits its target customer base and loan demand.
Risks
Credit Risk: High exposure to the microfinance segment makes it susceptible to asset quality deterioration due to economic downturns, localized events (e.g., floods, political unrest), and borrower income volatility.
Regulatory Changes: Being a regulated entity, changes in RBI policies, capital adequacy norms, interest rate caps on microfinance loans, or other prudential guidelines can significantly impact operations and profitability.
Competition: Intense competition from other SFBs, NBFCs, and some commercial banks can lead to pressure on Net Interest Margins (NIMs) and market share.
Operational Risks: Managing a large field force, cash handling, and preventing fraud across a wide geographic spread present significant operational challenges.
Interest Rate Volatility: Changes in the broader interest rate environment can impact both funding costs (deposit rates) and lending rates, affecting NIMs.
Management & Ownership
Ujjivan Financial Services Ltd. is the promoter and holding company of Ujjivan Small Finance Bank, holding a significant majority stake. The management team has extensive experience in the financial inclusion and banking sectors, having successfully navigated the transition from an MFI to an SFB. They are generally perceived as professional with a strong understanding of the target market. The ownership structure includes institutional investors, FIIs, and public shareholders, typical for a listed entity in India.
Outlook
Ujjivan is poised to benefit from India's structural tailwinds in financial inclusion and the formalization of the economy. The successful diversification of its loan book beyond microfinance and improved asset quality management will be critical for sustained growth and profitability. The bank's established branch network and underwriting expertise for underserved segments provide a strong foundation. However, it operates in a competitive and cyclical environment. Maintaining stringent credit underwriting standards, efficient collections, and agile adaptation to regulatory changes will be essential to mitigate risks associated with its target segments. The ability to grow its liability franchise (deposits) cost-effectively will also be a key determinant of its future performance and ability to generate stable returns.
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| #(Fig in Cr.) | Sep 2021 | Dec 2021 | Mar 2022 | Jun 2022 | Sep 2022 | Dec 2022 | Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Revenue | 736 | 708 | 850 | 1008 | 1040 | 1144 | 1231 | 1375 | 1496 | 1576 |
| Other Income | -4 | 24 | 41 | 50 | 60 | 50 | 97 | 81 | 62 | 59 |
| Total Income | 732 | 732 | 892 | 1058 | 1100 | 1194 | 1328 | 1456 | 1558 | 1635 |
| Total Expenditure | 521 | 677 | 409 | 327 | 285 | 365 | 516 | 510 | 530 | 600 |
| Operating Profit | 211 | 56 | 483 | 731 | 814 | 829 | 813 | 946 | 1028 | 1035 |
| Interest Expense | 262 | 261 | 282 | 313 | 337 | 391 | 453 | 499 | 572 | 617 |
| Depreciation | 40 | 38 | 38 | 39 | 40 | 43 | 42 | 39 | 42 | 49 |
| Profit Before Tax | -91 | -243 | 163 | 380 | 437 | 396 | 318 | 408 | 414 | 370 |
| Provision for Tax | -23 | -61 | 44 | 85 | 122 | 98 | 86 | 109 | 105 | 88 |
| Profit After Tax | -68 | -182 | 119 | 295 | 315 | 298 | 232 | 298 | 309 | 281 |
| Adjustments | 11 | 30 | -20 | -49 | -58 | -78 | -65 | -78 | -83 | -74 |
| Profit After Adjustments | -57 | -151 | 99 | 246 | 257 | 220 | 167 | 220 | 226 | 208 |
| Adjusted Earnings Per Share | -4.7 | -12.4 | 8.1 | 20.2 | 21.1 | 18.1 | 13.7 | 18.1 | 18.6 | 17.1 |
| #(Fig in Cr.) | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | TTM |
|---|---|---|---|---|---|---|---|---|
| Operating Revenue | 1349 | 1519 | 1944 | 2860 | 3066 | 2995 | 4421 | 5678 |
| Other Income | 48 | 31 | 71 | 110 | 115 | 99 | 358 | 299 |
| Total Income | 1398 | 1550 | 2015 | 2969 | 3181 | 3094 | 4780 | 5977 |
| Total Expenditure | 521 | 862 | 1023 | 1273 | 2209 | 2172 | 1593 | 2156 |
| Operating Profit | 877 | 688 | 992 | 1697 | 972 | 922 | 3187 | 3822 |
| Interest Expense | 543 | 602 | 727 | 1115 | 1121 | 1071 | 1493 | 2141 |
| Depreciation | 13 | 41 | 61 | 166 | 170 | 155 | 163 | 172 |
| Profit Before Tax | 322 | 45 | 204 | 416 | -319 | -304 | 1531 | 1510 |
| Provision for Tax | 114 | 19 | 54 | 117 | -80 | -73 | 391 | 388 |
| Profit After Tax | 208 | 26 | 150 | 299 | -239 | -231 | 1140 | 1120 |
| Adjustments | 0 | 0 | 0 | -16 | 40 | 39 | -250 | -300 |
| Profit After Adjustments | 208 | 26 | 150 | 282 | -199 | -192 | 891 | 821 |
| Adjusted Earnings Per Share | 17.4 | 2.1 | 12.4 | 23.2 | -16.3 | -15.8 | 73.2 | 67.5 |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Sales CAGR | 48% | 16% | 24% | 0% |
| Operating Profit CAGR | 246% | 23% | 36% | 0% |
| PAT CAGR | 0% | 56% | 113% | 0% |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Share Price CAGR | 114% | 17% | 23% | 5% |
| ROE Average | 42% | 8% | 9% | 8% |
| ROCE Average | 11% | 6% | 7% | 8% |
| #(Fig in Cr.) | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 |
|---|---|---|---|---|---|---|---|
| Shareholder's Funds | 1756 | 1732 | 1878 | 2840 | 2512 | 2323 | 3224 |
| Minority's Interest | 0 | 0 | 0 | 331 | 438 | 400 | 1019 |
| Borrowings | 2839 | 7600 | 11507 | 14181 | 16293 | 20764 | 30281 |
| Current Liability | 4107 | 171 | 615 | 1327 | 921 | 892 | 914 |
| Other Liabilities & Provisions | 10 | -73 | -50 | -57 | -298 | -370 | -284 |
| Total Liabilities | 8712 | 9430 | 13950 | 18622 | 19866 | 24009 | 35153 |
| Loans | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | 357 | 0 | 0 | 0 | 97 | 13 | 13 |
| Fixed Assets | 137 | 194 | 282 | 799 | 718 | 666 | 684 |
| Other Loans | 1611 | 19 | 23 | 28 | 30 | 33 | 40 |
| Other Non Current Assets | 33 | 4 | 2 | 21 | 5 | 6 | 18 |
| Current Assets | 6574 | 9213 | 13642 | 17775 | 19015 | 23291 | 34399 |
| Total Assets | 8712 | 9430 | 13950 | 18622 | 19866 | 24009 | 35153 |
| #(Fig in Cr.) | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 |
|---|---|---|---|---|---|---|---|
| Opening Cash & Cash Equivalents | 447 | 714 | 576 | 1079 | 1340 | 1934 | 2155 |
| Cash Flow from Operating Activities | -583 | 2190 | -3248 | -2464 | 1612 | 2826 | 2073 |
| Cash Flow from Investing Activities | -1559 | 113 | -448 | -1087 | -215 | -1785 | -4554 |
| Cash Flow from Financing Activities | 2409 | -2441 | 4198 | 3812 | -803 | -819 | 2640 |
| Net Cash Inflow / Outflow | 267 | -137 | 503 | 261 | 594 | 222 | 159 |
| Closing Cash & Cash Equivalent | 714 | 576 | 1079 | 1340 | 1934 | 2155 | 2314 |
| # | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 |
|---|---|---|---|---|---|---|---|
| Earnings Per Share (Rs) | 17.4 | 2.15 | 12.42 | 23.21 | -16.34 | -15.75 | 73.2 |
| CEPS(Rs) | 18.45 | 5.57 | 17.42 | 38.21 | -5.69 | -6.2 | 107.09 |
| DPS(Rs) | 0.8 | 0.5 | 1.3 | 0.8 | 0 | 0 | 5 |
| Book NAV/Share(Rs) | 146.88 | 141.67 | 152.28 | 228.56 | 200.08 | 185.42 | 259.88 |
| Net Profit Margin | 15.39 | 1.71 | 7.74 | 10.44 | -7.8 | -7.7 | 25.79 |
| Operating Margin | 64.06 | 42.54 | 47.89 | 53.53 | 26.15 | 25.61 | 68.39 |
| PBT Margin | 23.84 | 2.94 | 10.5 | 14.54 | -10.42 | -10.15 | 34.62 |
| ROA(%) | 2.38 | 0.29 | 1.29 | 1.83 | -1.24 | -1.05 | 3.85 |
| ROE(%) | 11.84 | 1.5 | 8.46 | 12.92 | -9.17 | -9.83 | 42.09 |
| ROCE(%) | 10.61 | 7.38 | 8.07 | 9.82 | 4.42 | 3.66 | 10.69 |
| Price/Earnings(x) | 24.37 | 160.95 | 28.02 | 6.4 | 0 | 0 | 3.5 |
| Price/Book(x) | 2.89 | 2.44 | 2.28 | 0.65 | 1.05 | 0.55 | 0.99 |
| Dividend Yield(%) | 0.19 | 0.14 | 0.37 | 0.54 | 0 | 0 | 1.95 |
| EV/Net Sales(x) | 7.92 | 7.37 | 7.69 | 5.27 | 5.3 | 6.62 | 6.99 |
| EV/Core EBITDA(x) | 12.19 | 16.27 | 15.09 | 8.88 | 16.72 | 21.49 | 9.7 |
| Interest Earned Growth(%) | 0 | 12.57 | 28 | 47.09 | 7.21 | -2.31 | 47.62 |
| Net Profit Growth | 0 | -87.5 | 479.71 | 98.52 | -180.06 | 3.6 | 594.7 |
| EPS Growth(%) | 0 | -87.66 | 478.26 | 86.97 | -170.38 | 3.58 | 564.67 |
| Interest Coverage(x) % | 1.59 | 1.07 | 1.28 | 1.37 | 0.72 | 0.72 | 2.03 |
| # | Dec 2021 | Mar 2022 | Jun 2022 | Sep 2022 | Dec 2022 | Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| FII | 26.65 | 28.22 | 30.71 | 30.57 | 31.82 | 31.14 | 40.48 | 36.47 | 34.98 | 35.34 |
| DII | 12.69 | 12.43 | 10.67 | 1.35 | 1.19 | 2.13 | 3.86 | 6.02 | 7.43 | 7.36 |
| Public | 60.66 | 59.35 | 58.62 | 68.09 | 66.99 | 66.73 | 55.66 | 57.51 | 57.58 | 57.3 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| # | Dec 2021 | Mar 2022 | Jun 2022 | Sep 2022 | Dec 2022 | Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| FII | 3.24 | 3.43 | 3.74 | 3.72 | 3.87 | 3.79 | 4.93 | 4.44 | 4.26 | 4.3 |
| DII | 1.54 | 1.51 | 1.3 | 0.16 | 0.14 | 0.26 | 0.47 | 0.73 | 0.91 | 0.9 |
| Public | 7.38 | 7.22 | 7.13 | 8.28 | 8.15 | 8.12 | 6.77 | 7 | 7.01 | 6.98 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.18 | 12.18 |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Sales CAGR | +48% | +16% | +24% | — |
| Operating Profit CAGR | +246% | +23% | +36% | — |
| PAT CAGR | — | +56% | +113% | — |
| Share Price CAGR | +114% | +17% | +23% | +5% |
| ROE Average | +42% | +8% | +9% | +8% |
| ROCE Average | +11% | +6% | +7% | +8% |
| # | Dec 2021 | Mar 2022 | Jun 2022 | Sep 2022 | Dec 2022 | Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| FII | 26.65 | 28.22 | 30.71 | 30.57 | 31.82 | 31.14 | 40.48 | 36.47 | 34.98 | 35.34 |
| DII | 12.69 | 12.43 | 10.67 | 1.35 | 1.19 | 2.13 | 3.86 | 6.02 | 7.43 | 7.36 |
| Public | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| # | Dec 2021 | Mar 2022 | Jun 2022 | Sep 2022 | Dec 2022 | Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| FII | 3.24 | 3.43 | 3.74 | 3.72 | 3.87 | 3.79 | 4.93 | 4.44 | 4.26 | 4.3 |
| DII | 1.54 | 1.51 | 1.3 | 0.16 | 0.14 | 0.26 | 0.47 | 0.73 | 0.91 | 0.9 |
| Public | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.18 | 12.18 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.17 | 12.18 | 12.18 |
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