Ujjivan Small Finance Bank Shares Break Out After RBI Rate Cut: SEBI RA Rajneesh Sharma Sees 'Classic Transformation Story'

Ujjivan Small Finance Bank shares are well positioned for growth following RBI's recent rate and CRR cuts, according to SEBI-registered analyst Rajneesh Sharma. 

At the time of writing, the stock was trading at ₹47.68, down 0.15 points or 0.3%.

The bank's strong FY25 financials, including an 8% rise in its gross loan book, improved asset quality, and robust deposit growth, combined with a technical breakout above long-term resistance, signal a compelling investment opportunity.

Sharma highlights the macro tailwinds from RBI's 50 bps repo rate cut to 5.5% and 100 bps CRR reduction, which increase liquidity and reduce borrowing costs, key for Ujjivan's focus on housing, MSME, and vehicle loans. 

The bank's secured loan share rose significantly to 44%, supporting asset quality improvements, while segmental growth drivers such as housing loans and vehicle loans underscore strong business momentum.

Technically, the stock broke out from a descending trendline, retested the ₹48-₹49 support zone, and saw volume spikes indicating institutional interest, with targets at ₹56, ₹61, and beyond. 

Sharma views the upcoming universal bank license application as a medium-term catalyst that could trigger a re-rating.

Risks include execution on secured growth, microfinance collection challenges in Karnataka, and uncertainty on the universal license timeline. 

The analyst calls Ujjivan SFB a“classic transformation story” from a small bank to a universal bank in the future.

On Stocktwits, retail sentiment was 'bullish' amid 'normal' message volume.

The stock has risen 39% so far in 2025.

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