Ujjivan SFB Shares Hit New High on 71% Q3 Profit Jump

Introduction

Shares of Ujjivan Small Finance Bank (SFB) surged to a new high on Friday, January 23, 2026, following the announcement of strong financial results for the third quarter of the fiscal year 2026. The bank's impressive performance, highlighted by a significant jump in net profit and record net interest income, prompted positive reactions from investors and led to several brokerage firms upgrading their target prices for the stock.

Stellar Q3 Financial Performance

Ujjivan SFB reported a robust 71% year-on-year (YoY) growth in its net profit, which stood at ₹186 crore for the quarter ended December 31, 2025. This substantial increase in profitability was driven by strong core income and healthy business expansion. The bank's Net Interest Income (NII) reached an all-time high of ₹1,000 crore, marking a 12.8% increase compared to the same period in the previous year. This growth in NII reflects the bank's effective management of its interest-earning assets and liabilities.

Robust Loan Growth and Disbursements

The lender's business growth momentum remained strong during the quarter. The gross loan book expanded by 21.6% YoY to reach ₹37,057 crore. This growth was supported by the highest-ever quarterly disbursements, which amounted to ₹8,293 crore. The strong disbursement figures indicate healthy credit demand and the bank's ability to effectively deploy its capital to expand its lending operations across various segments.

Market Reacts with Enthusiasm

The strong quarterly report card was well-received by the market. Ujjivan SFB's stock price rose by as much as 6.8% during the trading session on Friday to hit a new lifetime high of ₹66.2 per share. Although the stock pared some of its initial gains, it closed the day with a significant increase. Trading volumes were notably high, trading at 12 times the 30-day average, which signals strong investor interest and confidence in the bank's performance and future prospects. The stock has demonstrated strong performance throughout the year, rising 23% in 2026 so far, in contrast to a 3% decline in the benchmark Nifty 50 index.

Key Financial Highlights for Q3 FY26

Analyst Upgrades and Positive Outlook

Following the impressive results, several brokerage firms reiterated their positive stance on Ujjivan SFB and raised their price targets. Antique Stock Broking, which considers Ujjivan SFB its preferred pick in the microfinance space, maintained its 'Buy' rating and increased its target price to ₹80 per share. The brokerage highlighted the bank's lower slippage rates and normalizing return on assets (ROA) as key strengths.

Centrum Broking also maintained its 'Buy' rating, revising its target price upwards to ₹73. The firm cited the steady improvement in the bank's return ratios and its diversified business mix as reasons for the upgrade. Similarly, JM Financial revised its target price to ₹73, expressing confidence in the bank's ability to achieve its financial year 2026 guidance.

Management Guidance and Future Projections

The management of Ujjivan SFB has reaffirmed its confidence in achieving its ROA guidance of 1.2% to 1.4% for the fiscal year 2026. They anticipate a sharp improvement in the fourth quarter, driven by lower credit costs, stronger disbursements, and a declining cost of funds. Analysts project that the bank is well-positioned to deliver an ROA of around 1.7% by FY28, with Return on Equity (ROE) expected to improve to the 14-15% range over the same period. This positive forward-looking guidance underpins the optimistic sentiment surrounding the stock.

Conclusion

Ujjivan Small Finance Bank's strong performance in the third quarter of FY26 has solidified its position as a resilient player in the banking sector. The significant growth in profit, record NII, and expanding loan book have boosted investor confidence, leading to a new high for its stock price. With positive analyst ratings and a confident management outlook, the bank appears to be on a solid growth trajectory, well-equipped to capitalize on future opportunities in the financial services market.