Buy City Union Bank; target of Rs 200: ICICI Direct

ICICI Direct is bullish on City Union Bank has recommended buy rating on the stock with a target price of Rs 200 in its research report dated November 05, 2018.

Broker Research

November 13, 2018 / 17:19 IST

26 Aug, 2025 12:21

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ICICI Direct's research report on City Union Bank

NII increased 12.2% YoY to Rs 398 crore, in line with our estimate, led by healthy credit offtake. Margins came in at 4.32%, ~8 bps higher QoQ but remained 14 bps lower on a YoY basis Other income came in at Rs 119 crore; down 23.6% YoY, due to a subdued treasury performance. Accordingly, operating profit came in muted at Rs 296 crore, down 7.5% YoY Provisions were at Rs 68 crore, lowest in last eight quarters. This allowed PAT to come in line with estimate (Rs 168 crore, up 16% YoY) Asset quality stayed largely under control with absolute GNPA and GNPA ratio declining QoQ to Rs 848 crore & 2.85%, respectively. Net NPA ratio was flat at 1.69%. Slippages remained steady at Rs 136 crore, including two MSME with exposure of Rs 16 crore Credit growth was healthy and slightly higher-than-expected at 17.5% YoY to ~Rs 29425 crore. Deposits increased 11.8% YoY.

Outlook

We retain our BUY rating and target price of Rs 200 with a multiple of 2.7x FY20E BV. The bank seems to be in a better position vs. peers to leverage on the improving economic outlook.

For all recommendations report, click here