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Suryoday Small Finance Bank - a stock for investors with high risk appetite

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Growth guidance intact, but core portfolio stress needs to be watched
Suryoday Small Finance Bank, which debuted on the stock market on March 26, 2021, is recommended for investors with a high risk appetite due to its strong fundamentals and growth potential, despite its high valuation. The bank, which focuses on microfinance and has a significant presence in rural and semi-urban areas, reported a 34% year-on-year increase in net profit to Rs 58 crore for the quarter ended December 2020, driven by a 37% rise in net interest income. However, the stock's high price-to-book value ratio of 3.5 times and the inherent risks associated with small finance banks, such as asset quality concerns and regulatory risks, make it suitable only for investors willing to tolerate higher volatility and uncertainty.

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