Buy Union Bank of India; target of Rs 135: Motilal Oswal

Motilal Oswal is bullish on Union Bank of India has recommended buy rating on the stock with a target price of Rs 135 in its research report dated January 28, 2025.

Broker Research

January 29, 2025 / 21:33 IST

Buy

live

bselive
nselive

Volume

Todays L/H

Motilal Oswal's research report on Union Bank of India

Union Bank of India (UNBK) reported 3QFY25 PAT of INR46b (28.2% YoY, 27% beat), led by lower provisions and higher-than-expected other income. NII grew 0.8% YoY to INR92.4b (up 2.1% QoQ; inline). NIMs expanded slightly, 1bp QoQ to 2.91%, during the quarter. Loan book grew at 6.7% YoY/2.6% QoQ while deposits grew 3.8% YoY/ declined 2% QoQ; CD ratio thus increased to 75.6%. Fresh slippages improved to INR19.7b from INR52.2b in 2Q, down 27% YoY/62% QoQ. GNPA/NNPA ratios improved 51bp/16bp QoQ to 3.85%/0.82%, respectively. PCR ratio increased to 79.3%. We increase our earnings estimate for FY26/27 by 5.9%/3.5%, factoring in lower credit costs and higher other income, and estimate RoA/RoE of 1.1%/15.5% by FY26. Reiterate BUY with a TP of INR135 (based on 0.8x Sep’26E ABV).

Outlook

We increase our earnings estimate for FY26/27 by 5.9%/3.5%, factoring in lower credit costs and higher other income, and estimate an RoA/RoE of 1.1%/15.5% by FY26. Reiterate BUY with a TP of INR135 (based on 0.8x Sep’26E ABV).

For all recommendations report, click here