Ujjivan will do the transformation in this financial year. Currently, it is available at P/BV of 1.75x and 1.87x respectively, we expect these two stocks to outperform in the coming years with a target of Rs 230 and Rs 495 initially.
Chhitij Jain
Equitas Holdings| Target: Rs 230 | Return: 79 percent
Ujjivan Financial Services| Target: Rs 495 | Return: 99 percent
Both stocks are on different themes. They are neither universal banks nor NBFC. They are small finance banks with different guidelines issued by RBI:
a) To extend 75 percent of its Adjusted Net Bank Credit (ANBC) to the sectors eligible for classification as priority sector lending (PSL)
b) At least 50 percent of its loan portfolio should constitute loans and advances of up to Rs 25 lakh.
Both stocks are expected to "nail it" owing to strong demand from rural penetration. Equitas has already made its secure loan book to 70 percent and has transformed its maximum branches into banks.
Ujjivan will do the transformation in this financial year. Currently, it is available at P/BV of 1.75x and 1.87x respectively, we expect these two stocks to outperform in the coming years with a target of Rs 230 and Rs 495 initially.
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