Buy City Union Bank; target of Rs 179: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on City Union Bank

CUBK’s earnings were in line with estimates, with healthy and broad based loan growth (11% QoQ), superior NIM (4.2%), stable core C-I ratio (47%) and a dip in LLP (78bps). While slippages were higher QoQ, the overall stressed book was lower sequentially at 2.3% with repayments in the restructured book.

Outlook

Lower stressed assets, conservative provisions towards SR’s, healthy NIM and CRAR, and superior RoA profile provide comfort. Weak regional PSBs give CUBK an opportunity to revive growth and reap the oplev benefits. Maintain BUY with a TP of Rs 179 (2.5x Mar-19E ABV of Rs 72).

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