HomeMarketsUjjivan SFB drops 5% on higher credit cost projection

Ujjivan SFB drops 5% on higher credit cost projection

Ujjivan Small Finance Bank‘s shares plunged a tad over 5% Monday after its management projected a higher credit cost for the fiscal 2024-25 and a 20% lending growth, which is at the lower end of a range given earlier.

The bank’s shares ended 5.2% lower at Rs 45.85 on BSE, after recovering a bit from the intra-day low of Rs 44.70.

In a presentation to analysts, the bank management gave a guidance of 1.7% credit cost, which is higher than the range of 1.4% to 1.5% given in May, following the announcement of the fourth quarter earnings.

“We estimate our gross loan book to be growing between 20% and 25% for the financial year 2025… A firmer number will be given on the exact growth, whether we are on the higher end or the lower end of the 20% to 25% growth,” managing director Ittira Davis had said in May in a post-earnings call with analysts.

The lender’s gross loan book grew 24% year-on-yer to Rs 29,780 crore at the end of March.The company had in May also said that it has seen some stress in pockets of Punjab and Haryana. In Down South, the lender’s gross loan book also underperformed in Kerala and Tamil Nadu. The lender slowed its disbursal in these states as per an internal policy.

Content Source: economictimes.indiatimes.com

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