UBS has expressed a cautious stance on the microfinance sector, expecting growth to remain muted in FY25. The brokerage is neutral on banks with significant microfinance exposure, including Bandhan Bank (46% of its book), IndusInd Bank (9% exposure), and AU Small Finance Bank (7% exposure).
In contrast, UBS prefers banks with diversified portfolios and stronger fundamentals, such as HDFC Bank, ICICI Bank, and Federal Bank. The brokerage has also issued a “sell” call on SBI and SBI Cards, citing potential concerns over their growth and valuation dynamics.
UBS remains watchful of the challenges faced by the microfinance segment, while favoring institutions with minimal exposure to this sector for long-term resilience.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor before making investment decisions.
