Ujjivan SFB target raised to Rs 80 on MFI rebound

Brokerage stance stays positive despite volatility

Equity markets have remained volatile, with investors cautious amid geopolitical tensions and broader risk-off sentiment. Even in this backdrop, Ujjivan Small Finance Bank (Ujjivan SFB) continues to attract positive commentary from brokerages focused on a recovery in microfinance. Emkay Global has reiterated a BUY view on the stock in multiple notes shared in the provided material. The key thesis is that a stabilising microfinance (MFI) cycle, combined with a push towards secured lending, can improve the bank’s profitability metrics over the next few years.

The latest outlook in the material also reflects an upward revision in valuation assumptions and target price. Alongside the recovery narrative, the long-awaited possibility of a universal bank licence remains an important part of the debate around medium-term positioning.

Emkay raises target price to Rs 80 from Rs 72

In the “Outlook” section provided, the brokerage states it retains BUY and raises its target price by about 11% to Rs 80 (from Rs 72). The revision is based on “rolling forward” the valuation to 1.8x FY28E adjusted book value (ABV).

The same outlook adds that Ujjivan remains a “strong play” on MFI recovery and expects this to lift return on assets (RoA) to 1.6% to 1.9% over FY27-29E, from 1.3% in FY26.

Separately, another Emkay note referenced in the input reiterates BUY with a Dec-26E target price of Rs 72, implying 1.6x FY28E ABV. The presence of multiple target prices in the material indicates the brokerage view has evolved over time as assumptions and valuation anchors shifted.

What the MFI recovery thesis implies for RoA

The central driver in Emkay’s outlook is a recovery in the microfinance segment. The brokerage explicitly links MFI recovery to improving RoA, stating RoA could move to 1.6% to 1.9% during FY27-29E, from 1.3% in FY26.

Another excerpt in the provided text also cites a different RoA path: 1.4% in FY26E to 2.2% in FY28E. Since both figures appear in the input, they reflect different snapshots of estimates shared in the compilation.

What is consistent across the notes is the idea that asset quality and portfolio mix are central to the profitability trajectory. The emphasis is not only on growth, but also on improving the quality of growth, especially after a period where provisions and margin conditions were described as elevated in one of the snippets.

Greater focus on secured lending, especially gold loans

One management update referenced in the material says the bank is focusing on increasing secured lending, particularly gold loans. This shift matters because secured products typically have different risk characteristics than unsecured microfinance.

A management expectation highlighted in the document is that the impact from upcoming elections and geopolitical issues would be minimal. The same context mentions strategic initiatives and improved customer retention supporting the MFI portfolio, with the portfolio projected to grow “significantly” over the next few years, though no specific growth percentage is provided.

Universal bank licence: a recurring catalyst in notes

The management-meet update described the universal bank licence as “long awaited.” Another excerpt explicitly describes Ujjivan as a potential candidate for a universal bank licence and says this should be “capital and RoA-positive.”

The broader compilation also includes references to other brokerages discussing the licence as a “structural milestone,” but the most direct language in the provided text is that it remains awaited and is viewed as supportive for long-term returns if it materialises.

Where the stock traded and how brokerages framed upside

The input includes multiple “current” price references across different dates and sources:

• One Emkay management update (dated March 19, 2026) lists CMP Rs 56 and TP Rs 72.
• A Hindi-language excerpt references Rs 52.90 as the current level and a target of Rs 72, describing about 36% upside.
• Another snippet summarises: Buy | Target Rs 72 | LTP Rs 55 | Potential Upside 30%.

The same Hindi excerpt notes the stock’s 52-week high was Rs 68 and 52-week low was Rs 52.81, and that the share was trading near its 52-week low at the time of that note.

Ownership and institutional positioning mentioned in the input

The compilation includes a specific disclosure on foreign investor holdings: FII holding fell from 17.1% in the September 2025 quarter to 15.5% in the December 2025 quarter.

It also notes mutual fund participation increased in terms of the number of schemes holding the stock, from 77 in December 2025 to 87 in January 2026. The value of MF holdings is stated as Rs 3,109 crore.

These data points suggest changing positioning across investor categories during the period referenced, without implying anything about future flows.

Operating footprint and basic profile

The input states Ujjivan Small Finance Bank is headquartered in Bengaluru and started banking services on February 1, 2017. As of December 2025, it had 777 branches active across the country.

These operational details matter because microfinance-led models rely heavily on distribution, collections, and customer servicing infrastructure.

Key facts at a glance

What to track based on the provided notes

From the material, three monitorables stand out. First is whether the MFI recovery translates into the RoA improvement described in the outlook. Second is execution on the shift towards secured lending, with gold loans explicitly identified as a focus area. Third is any tangible progress on the universal bank licence, which appears repeatedly across broker commentary as an important milestone.

The management commentary included in the compilation also flags expectations of minimal disruption from elections and geopolitical issues, but the notes remain grounded in portfolio choices, asset quality, and valuation.

Conclusion

Emkay’s latest outlook in the provided material keeps a BUY view on Ujjivan SFB and lifts the target price to Rs 80, citing a microfinance recovery and an RoA improvement path over FY27-29E. Other excerpts in the compilation also reiterate BUY with targets such as Rs 72, while highlighting a mix shift to secured lending, including gold loans, and the long-awaited universal bank licence as key themes to watch.