Union Bank of India's asset quality demonstrates ongoing enhancement, characterized by a consistent decline in NPA ratios. The bank has effectively contained slippages, with the bank ranking the second-best in the industry in terms of recoveries. Union Bank of India continues to maintain its recovery guidance of ~Rs 160 billion in FY25.
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.
Motilal Oswal Report
Union Bank of India has been reporting a healthy performance, with earnings driven by healthy revenue and controlled provisions. Fresh slippages have been under control, which, coupled with healthy recoveries and upgrades, has resulted in an improvement in asset quality ratios.
Further, a lower credit cost and controlled restructuring provide a better outlook on asset quality. Loan growth is expected to trend at ~11%, aided by healthy growth in retail, agriculture and MSME segment.
Margins are also expected to remain in the guided range of ~2.8-3% despite the rate cut, supported by higher MCLR-linked loans.
We estimate loans to grow at ~10% over FY25-27E, with return on asset/return on equity at 1.1%/15.5% by FY26E. We reiterate our Buy rating with a target price of Rs 135 (premised on 0.8 times Sep'26E adjusted book value).
Click on the attachment to read the full report:
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, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
