 "Ujjivan Financial")
Ujjivan Financial Services’ stock has remained under pressure due to lack of clarity on listing of its small finance bank and loan book concentration to unsecured micro finance, among others. The stock’s current valuation of around 2 times its FY20 estimated book value is 11-12 per cent below its historical average since its listing in 2016. The valuation picture is unlikely to improve significantly in the near term, thanks to increase in costs.
The likely elevated costs would hurt earnings growth and return ratios of the bank in the near term. Analysts at IIFL and Emkay Research estimate 10-20 basis
