According to Shrikant Chouhan of Kotak Securities, Ujjivan Small Finance Bank is positioned as a strong buy opportunity with a current market price of ₹63 and face value of ₹85. The bank has successfully transformed from a microfinance-led lender into a diversified retail and MSE bank, with a loan book of ₹407 billion and deposits of ₹457 billion as of March 2026. The bank's microfinance portfolio has strategically declined from 71% of advances in FY24 to 51% in FY26, while affordable housing now comprises 26% and MSE accounts for 8% of the loan portfolio. Management guides for secured loans to reach 56% of the book in FY27, from 49% today, with CASA at 28.6% of total deposits.
As reported by Kotak Institutional Equities, the bank demonstrated healthy growth across cycles with 26% loan growth in FY24, 17% in FY25 despite industry-wide microfinance stress, and 27% in FY26. Deposits grew 21% in FY26, with projections showing loan growth of approximately 24% annually through FY29E. Net interest income is expected to grow 25%, 20%, and 21% over FY27E-29E respectively, while profit is projected to increase from ₹6.9 billion in FY26 to ₹11.5 billion, ₹12.9 billion, and ₹14.5 billion over FY27E-29E. The bank has navigated the stress cycle better than most peers, with the shift to secured lending broadening the earnings base so that no single segment drives returns.
According to the analysis, asset quality has shown significant improvement with credit cost declining from 3.5% in Q4FY25 to 1.5% in Q4FY26, while net NPLs stand at 0.4%. The bank recorded the lowest microfinance slippages among peers during Q2FY26-Q3FY26. Management has guided credit costs at 1.4-1.5% for FY27, with return on equity expected to recover from 10.7% in FY26 to approximately 15.8% in FY27E and 15.6% in FY28E. The combination of a largely completed clean-up and longer runway positions the bank well for steady book value compounding over a multi-year horizon.
As reported by Kotak Securities, Cello World is recommended as a buy at ₹330 with a face value of ₹550, showing resistance at ₹340-350 and support at ₹320-315. The company reported a 0.4% year-on-year decline in topline during Q1 despite adding Cello-branded WI sales, with consumerware sales declining 8.4% due to price hikes and continued decline in steel products. However, EBITDA remained in line with expectations, led by gross margin outperformance and lower other expenses. Consumer demand remained subdued as discretionary spending was hit by inflationary pressures and macro uncertainty, with steep price hikes of 7-20% further weighing on volumes.
According to the analysis, Kotak Securities estimates revenue, EBITDA, and EPS CAGR of approximately 12.4%, 11.6%, and 11.5% respectively over FY2026-29E for Cello World. The company's GW furnace remained at 60% utilization with GW sales growing 30-35% year-on-year, while writing instruments grew 52% year-on-year driven by Cello brand contribution. The valuation is considered undemanding at 1.7x March 2028E adjusted book for Ujjivan SFB, with key monitorables including CASA mobilization sustainability and the planned equity raise in 2HFY27.
