Union Bank of India
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Union Bank of India has demonstrated a cautiously optimistic outlook, driven by management's focus on credit growth and liquidity management. The bank's guidance for credit growth of 12-13% outpaces industry averages, supported by a strategic shift towards higher-yielding segments such as MSME and retail. However, muted deposit growth at 3.5% YoY poses a risk to sustaining this loan growth. Management's emphasis on improving net interest margins (NIMs) and asset quality, alongside initiatives like Project Muskaan, aims to enhance operational efficiency and profitability. Vista's financial outlook reflects these developments, projecting improved margins and stable revenue growth, with a fair valuation aligned with intrinsic value. The macroeconomic environment in India, characterized by robust growth and favorable liquidity conditions, further supports this outlook. Over the next 12-24 months, key opportunities include the mobilization of FCNR deposits and strategic management of the ECL transition, while watchpoints include potential slippages in the corporate book and the challenge of matching deposit growth with credit demand
Why We Like This Stock
- Management's guidance for credit growth of 12-13% exceeds industry expectations, indicating strong demand for banking services
- Improved NIMs and asset quality reflect effective management strategies and a focus on higher-yielding segments
- The favorable macroeconomic environment in India supports liquidity and credit demand, enhancing growth prospects
Things To Watch Out For
- Muted deposit growth at 3.5% YoY could constrain future loan growth if not addressed effectively
- Potential lumpy slippages in the corporate book may impact asset quality and profitability
- Execution risks related to the transition in the ECL framework and competition for retail liabilities could pose challenges
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 37,012 | 37,684 | 37,322 | 40,039 | 44,349 |
| Profit Before Tax (Cr.) | 21,505 | 23,422 | 24,284 | 29,331 | 30,262 |
| PBT Margin | 58.1% | 62.2% | 6506.6% | 73.3% | 68.2% |
| Net Profit (Cr.) | 13,796 | 18,025 | 19,430 | 22,585 | 23,301 |
| Earnings Per Share | 18.1 | 23.6 | 25.5 | 29.6 | 30.5 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Anand Rathi | ▲ Buy | 206 | 16-Jul-2026 |
| Antique | ► Hold | 212 | 16-Jul-2026 |
| Axis Securities | ▲ Buy | 208 | 24-Apr-2026 |
| BofA | ► Hold | 195 | 07-Apr-2026 |
| HDFC Securities | ► Add | 200 | 24-Apr-2026 |
| IDBI Capital | ▲ Buy | 197 | 16-Jul-2026 |
| Kotak Securities | ▲ Buy | 215 | 16-Jul-2026 |
| Motilal Oswal | ► Neutral | 190 | 16-Jul-2026 |
| Prabhudas Liladhar | ► Accumulate | 190 | 16-Jul-2026 |
| UBS | ► Neutral | 195 | 16-Jul-2026 |
Company Overview
Show Company Profile
Union Bank of India provides banking products and services in India. It operates in four segments: Treasury Operations, Retail Banking Operations, Corporate and Wholesale Banking, and Other Banking Operations. The company provides its products and services to individuals, commercial enterprises, large corporates, public bodies, and institutional customers. Union Bank of India was incorporated in 1919 and is headquartered in Mumbai, India.