UJJIVAN FINANCIAL SERVICES LTD.

- UPGRADE
Particulars

FY12

FY13

FY14

Date: 05.08.16

FY15

FY16

(Millions)
Revenue from
operations

1482

2225

3479

5993

10073

Other income

81

114

98

126

204

Total Income

1563

2339

3577

6119

10276

Provisions and
write offs

58

69

83

210

253

Total Expenses

1565

1862

2688

4974

7556

Current tax

16

161

316

468

1036

Deferred tax

-19

-13

-12

-81

-88

Total tax expense

-3

148

304

387

948

Profit after tax

329

584

758

1772

Advances

6912

11260

16173

32187

50644

Share capital

573

656

656

861

1012

Reserves and
surplus

1830

2524

3069

6503

10966

Borrowings

6172

9975

16500

31218

43380

Provisions

115

156

257

485

760

Other Liabilities

260

258

305

696

1155

Total

8951

13569

20787

39763

57273

(Source: Company presentation)

Key highlights of the Q1FY17 results

Robust Profitability: Net Profit at Rs.71.37 crore in Q1FY17; a jump of 102.51% over Rs.35.24 crore
in Q1FY16 due to reduction in Cost to Income ratio at 45.60% in Q1FY17 from 54.27% in Q1FY16.
Total income has risen to Rs329.32 crore in Q1FY17, an increase of 50.46% over Rs.218.87 crore in
Q1FY16 and 10.52% over Rs.297.97 crore in Q4FY16.
The EPS stands at Rs 6.39 in Q1FY17 from Rs.5.23 in Q1FY16, which is 22.18 % YoY increase. The
company RoAA stands at 4.85% and RoAE at 20.27% in Q1FY17, which was 3.6% and 18.7% in
Q1FY16.

Aggressive lending in MSE and Housing segments: MSE, Agriculture, and Housing segments are
showing traction. Increase in the share of Individual Lending to 13.4% in Q1FY17 from 12.9% in Q4FY16
is indicating shift from Group loans to high ticket size individual loans.

Significant growth in Loan book: Amidst of challenging times the NBFC company has shown
significant increase in the loan book. In Q1FY17 gross Loan Book stands at Rs.5, 850.9 crore, which
is 66.5% over Q1-FY16 and 8.6% over Q4-FY16.

Improvement in NIM and NII: The Company has improved their Credit rating; they have efficient
cost management practices. The Company has also improved refinancing facilities from NABARD &
MUDRA, this has positive impact on Net interest margin to 12.96 % in Q1-FY17 increased from
11.59% in Q1-FY16 and 12.65% in Q4-FY16. Net Interest Income at Rs.172.05 crore, an increase of
76.93% over Rs.97.24 crore in Q1-FY16 and 13.26% over Rs.151.91 crore in Q4-FY16.
Weighted average cost of Debt has been reduced from 12.90% in Q1FY16 to 11.56% in Q1FY17.

Capital Adequacy and Nonperforming Assets: Despite challenging times and aggressive loan
disbursements, the company is able to limit Net NPA at 0.04% and Gross NPA at 0.18%. The
company is adequately cushioned with CAR at 29%, which is above RBI mandatory requirement of
15%.
Benefits from digitalization and government initiatives: As on June 2016, 77% of the customers
have been linked to Government flagship program of AADHAAR. This will improve the recoveries
management, which was a serious problem for micro finance lending historically. Moreover, the
proposed enhancement of DBT (Direct Benefit Transfer) to AADHAAR enabled accounts may further
augment both the deposits as well as advances volumes of existing accounts.
The NBFC is also focusing more towards cashless disbursement of loans in a systematic manner to
reduce the cost of disbursements and recoveries. Cashless Disbursement stands at 65.89% in
Q1FY17 from 52.27% in Q1FY16.
Peer group Comparison
Name of the
Company

Market
Cap (Cr.)

Face
Value

Book
Value (Rs.)

(Rs.)

TTM
EPS

CMP

P/B

P/E

(Rs.)

(Rs.)

UJJIVAN FINANCIAL
SERVICES

5405.99

10.00

136.95

20.86

464

3.38

22.24

EQUITAS HOLDINGS

6075.24

10

50.14

0.06

181

3.62

3017

CAPITAL FIRST

6538.57

10

175.93

18.71

715

4.06

38.21

SATIN CREDITCARE
NETWORK

2044.89

10

101.51

18.13

640

6.31

35.30

BHARAT FINANCIAL
INCLUSION

10443.07

10

124.97

37.44

818

6.55

21.85

(Source, Company Presentation, Ace Equity, as on 05.08.16)

Financials

Net Interest Income

Net Interest Margin (%)
Net Profit
Gross NPA (%)
Net NPA (%)
Book value per share (Rs.)
EPS
ROAE (%)
ROAA (%)
P/B
P/E

2015-16
Audited

2016-17
Estimated

5099.4
12.30
1772
0.15
0.04
119
20.2
18.30
3.70
3.87
22.77

8258.5
13.60
2126.40
0.19
0.07
160.65
24.24
21.86
4.92
2.84
18.85

(Rs in Millions)
2016-17
Revised
Estimated
8314.44
13.6
2690.02
0.20
0.07
180.65
25.56
24.90
5.03
2.53
17.87

Valuation
Considering the past performance, present setup and things in
pipeline, the management is confident of achieving their
targets. We based on the information and data available to us;
expect the company to post a reasonable growth rate of ~60%
in advances in FY17. Company has provided a ROE 18.30%
which we expect to increase further to 24.90 in FY17E. The
company currently trades at ~3.38 P/B and forward P/B works
out to 2.57 P/B FY17E; as our previous target (28.06.16) of
Rs.482/- has been achieved.

Particulars (Rs.)
Book value ( FY 17E)

180.65

Target multiple ( P/B)

3.2

Target as per multiple

574

We continue to maintain our positive outlook on the stock.

Investors may accumulate the stock on dips in the entry range of Rs.419-426 in the next 6-9 months for
a price target of Rs.574.