SBI Securities Recommends Buying Suryoday Small Finance Bank Stock with 20% Potential Upside

In April, small finance banks (SFBs) showed strength in the stock market, driven by positive business updates for the March quarter, which highlighted double-digit growth in both advances and deposits.

SBI Securities, a brokerage firm, has recommended buying Suryoday Small Finance Bank stock with a ‘buy’ rating and a target price of ₹227.8, indicating a potential upside of over 20%.

Suryoday Micro Finance Limited was established to provide loans to women in urban and semi-urban areas using the joint liability group (JLG) lending model. It transitioned into a small finance bank in January 2017. As of December 2023, the bank operated in 15 states and Union Territories (UTs) across India through 672 branches, with a strong presence in Maharashtra, Tamil Nadu, and Odisha. Suryoday served 26.3 lakh clients while managing a portfolio of ₹7,600 crore as of December 2023.

The stock of Suryoday Small Finance Bank has seen an increase of nearly 16.55% in the last month and 18.91% in the last six months.

SBI Securities outlined four reasons to invest in Suryoday Micro Finance stock:

  1. Scaling up operations in other segments: Suryoday has been diversifying its product mix, with advances reaching ₹7,600 crore as of December 2023, up 41% YoY. While microfinance loans still dominate the portfolio at 58%, the bank has been expanding into newer products like commercial vehicles, Small and Medium Enterprises (MSMEs), housing loans, and financial intermediary groups. Secured loans now make up 50% of the portfolio.
  2. Improvement in CASA deposits and increased retail deposit share: Suryoday has been strengthening its retail deposit base, with total deposits reaching ₹6,484 crore, up 38% YoY. Retail deposits now account for 82.5% of the total, with the CASA share witnessing a 500 bps improvement YoY to 19% as of December 2023. The bank plans to further increase the CASA share, which will support net interest margin (NIM) expansion.
  3. Expected improvement in asset quality: The gross non-performing assets (GNPA) ratio improved to 2.9% from 4.2% YoY as of December 2023, mainly due to write-offs/sales to asset reconstruction companies (ARCs), recoveries & upgrades, and a decline in slippages. The bank’s provision coverage ratio (PCR) also improved to 54% as of December 2023.
  4. Healthy liquidity coverage ratio (LCR): The liquidity coverage ratio stood at 150% for the quarter ended December 2023, up from 130% in the previous quarter, indicating robust liquidity position.

Overall, SBI Securities sees potential for growth and improvement in various aspects of Suryoday Small Finance Bank, making it an attractive investment opportunity.

Frequently Asked Questions (FAQ)
How Can I buy Or Invest in shares?
You can easily buy the stocks/shares of through either a broker or a financial institution by opening a Demat & Trading account online via Angel One.
How to buy Stocks/Shares?
To buy stocks with Angel One, you can follow these simple steps:
Open a Demat account with Angel One.
Explore the stock market, find Sat Industries, and place your order.
What’s the cost to open a Demat account with Angel One?
It’s free to open a Demat account with us.
Is Angel One AMC free?
First-year AMC is free, and from the second year, it’s Rs. 20 per month.
What are the brokerage charges for a Demat account with Angel One?
Zero brokerage for equity delivery trades; Rs. 20 per order for intraday.
Disclaimer: The views and investment tips expressed by investment experts on are their own and not those of the website or its management. advises users to check with certified experts before taking any investment decisions.​​
Daily Index & Stock Option Research On Whatsapp
We will be happy to hear your thoughts

      Leave a reply

      Share Price India News