HDFC Securities is bullish on City Union Bank has recommended buy rating on the stock with a target price of Rs 236 in its research report dated January 28, 2019.
HDFC Securities' research report on City Union Bank
Yet again, CUBK performed consistently, across parameters. Loan growth was steady and broad based at 17%, fees grew ~16%, NIMs improved ~10bps sequentially, CASA (24%) and the PCR (65%) remained stable. Superior performance can be inferred from a closer look at the fine print: NIMs driven by growth in avg loans, sequential SA growth of ~8% (after 3% in 2Q), a stable net stressed book (even after the slippages of the large paper exposure of ~Rs 800mn) and conservative coverage (~46%) on the SR book.
Given these virtues, we assign a target multiple of 3xDec-20E ABV to arrive at a TP of Rs 236. Maintain BUY.
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