Mehabe score: 3 G Factor: 2 Piotski Score: 5 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 5.
Description
Ujjivan Small Finance Bank is a mass market focused bank in India, catering to financially unserved and underserved segments and committed to building financial inclusion in the country. Ujjivan Small Finance Bank has a diversified portfolio with branches spread across 24 states and union. Apart from the network of branches, ATMs and Automated Cash Recyclers, Bank has phone banking unit that services customers in nine languages, a mobile banking application that is accessible in five languages as well as internet banking facility for individual and corporate customers. The Bank also has portfolio of loans to Financial Institutions.Site:UJJIVANSFBMain Symbol:UJJIVANSFB
Stock trades at 21.8, below its 50dma 22.67 and below its 200dma 28.9. The stock remains bearish on technicals
The 52 week high is at 44.60 and the 52week low is at 17.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.19 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 7.56% for last 3 years.
-Earnings include an other income of Rs.356.75 Cr.
Competition
– The industry trades at a mean P/E of 20.4x. Kotak Mah. Bank trades at the industry’s max P/E of 42.08x. UJJIVANSFB trades at a P/E of x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 6.0. UJJIVANSFB has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 1.0%. The max 1- month return was given by ICICI Bank: a return of 10.91 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 645.0 cr compared to Rs 754.0 cr for period ended Sep 2020, a fall of 14.5%
Operating Profits reported at Rs 804.0 cr for period ended Sep 2021 vis-vis 400.0 for period ended Sep 2020 .
Operating Margins expanded 7160.1 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs -1.58 compared to Rs -1.35 for previous quarter ended Jun 2021 and Rs 0.56 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2593.0 cr for period ended TTM vis-vis sales of Rs 2806.0 cr for the period ended Mar 2021, a fall of 8.2%. The 3 year sales cagr stood at 12.3%.
Operating margins shrank to -1212.0% for period ended TTM vis-vis -224.0% for period ended Mar 2021, contraction of 98800.0 bps.
Net Profit reported at Rs -650.0 cr for period ended TTM vis-vis sales of Rs 8.0 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 2657.0 cr for period ended Mar 2021 vis-vis Rs 242.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 0.0% compared to 8.0% over the last 3 Years. – The stock has given a return of -32% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is -5% vis-vis a compounded sales growth of 24% over the last 3 Years. – The compounded profit growth on a TTM basis is -190% vis-vis a compounded profit growth of 9% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has fallen for the period ended Sep 2021. The Sep 2021 fii holding stood at 0.13% vis-vis 4.0% for Jun 2021 – Public shareholding has risen for the period ended Sep 2021. The Sep 2021 public holding stood at 15.37% vis-vis 10.53% for Jun 2021
Conclusion
– Stock is trading at 1.19 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 7.56% for last 3 years.
-Earnings include an other income of Rs.356.75 Cr.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 22.67 and is trading at 21.8. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
