Union Bank of India
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Union Bank of India is strategically pivoting towards a digital-first growth model, emphasizing efficiency and sustainable practices. Management's focus on enhancing its funding profile by increasing CASA and retail deposits has already yielded a reduction in deposit costs, which is crucial for margin improvement. The bank's commitment to aggressive growth in the RAM sector, alongside a disciplined approach to asset quality, positions it favorably for the next 12-24 months. Vista's financial outlook reflects a recovery in revenue growth and improving margins, supported by a robust capital base and a favorable industry environment. The bank's expected credit growth of 12-13% outpaces industry averages, indicating strong market positioning. However, challenges such as muted deposit growth and potential regulatory changes could impact future performance. Overall, Union Bank is well-positioned to capitalize on growth opportunities while managing execution risks effectively
Why We Like This Stock
- Management's focus on increasing CASA and retail deposits is reducing funding costs and enhancing margins
- The bank's aggressive growth strategy in the RAM sector is expected to drive credit growth above industry averages
- A strong capital base and improving asset quality position the bank favorably for future profitability
Things To Watch Out For
- Muted deposit growth could constrain future loan growth if not addressed
- Potential regulatory changes may introduce operational challenges
- Increased competition in the banking sector could pressure margins
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 37,012 | 37,684 | 37,322 | 39,929 | 43,344 |
| Profit Before Tax (Cr.) | 21,505 | 23,422 | 24,284 | 27,500 | 28,871 |
| PBT Margin | 58.1% | 62.2% | 65.1% | 68.9% | 66.6% |
| Net Profit (Cr.) | 13,796 | 18,025 | 19,430 | 21,175 | 22,230 |
| Earnings Per Share | 18.1 | 23.6 | 25.5 | 27.7 | 29.1 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Anand Rathi | ▲ Buy | 206 | 16-Jul-2026 |
| Antique | ► Hold | 212 | 16-Jul-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.