NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
IDBI Capital Report
The brokerage firm IDBI Capital has initiated coverage on Union Bank of India with Buy rating, setting a 12-month target price of Rs 187, valued at 0.88 times FY28E book-value, implying 15% upside from current levels.
The brokerage highlighted that Union Bank of India, India's fifth-largest PSU bank with a Rs 23.8 lakh crore business, has completed one of the most compelling post-merger transformations in Indian public sector banking.
Gross non-performing asset has declined from 13.7% in FY21 to 2.82% in FY26, PAT crossed Rs 18,697 crore compounding at 45% compound annual growth rate from FY21, ROA has held above 1.2% for two consecutive years, and CRAR at 18.1% is the strongest among large PSBs.
Yet the stock trades at approximately 1.0x FY27E P/ABV — a material discount to peers despite a return profile that is structurally superior on most metrics.
Key risks include sustained pressure on net interest margins due to a lower interest rate environment, slower-than-expected mobilisation of low-cost deposits, deterioration in macroeconomic conditions affecting corporate asset quality, increased competition for retail liabilities, regulatory changes relating to capital or provisioning requirements, and any slowdown in credit demand.
Maintaining superior asset quality while expanding the retail and MSME franchise will remain critical to sustaining profitability over the medium term.
Click on the attachment to read the full report:
ALSO READ: Eternal Shares In Focus As Motilal Oswal Sees Up To 34% Upside; Should You Buy? Check Target Price
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
