Union bank

Union Bank of India share price: Buy Union Bank of India, target price Rs 50: Motilal Oswal

has a call to buy on Union Bank of India with a target price of Rs 50. The current market price is Rs 37. The period given by the analyst is one year when the price of Union Bank of India can achieve the set target.

Union Bank of India, incorporated in 1919, is a banking company (having a market capitalization of Rs 25220.22 Crore).

Major revenue/income segments of Union Bank of India include interest and discounts on advances and bills, income from investments, interest on balances with RBI and other interbank funds and interest for l year ending March 31, 2021.

finance

For the quarter ended 31-03-2022, the company reported consolidated total revenue of Rs 19,353.85 Crore, down -4.35% from last quarter, total revenue of Rs 20,233.19 Crore and down -7.41% compared to the same quarter last year. Total income of Rs 20902.48 Crore. The bank reported a net profit after tax of Rs 1557.09 Crore in the last quarter.

Investment rationale
UNBK had a mixed quarter with earnings beaten by cash gains, lower operating expenses and tax expenses. Provisions continued to be elevated with new slippages up 66% QoQ due to a large corporate account, while the outlook looks better as evidenced by a further reduction in SMA/restructured loans. Loan growth accelerated and was supported by all segments – corporate, agriculture, retail and MSMEs. It reduces PAT estimates by 17% and 13% for FY23 and 24, respectively, due to lower other income (rising bond yields) and estimates a RoA/RoE of 0.7%/12.4 % for UNBK in FY24. It maintains BUY with a TP of INR50 (based on 0.6x FY24E ABV)


Promoter/Fii Holdings
Promoters held 83.5% of the company’s capital as of June 30, 2021, while FIIs held 1.7%, DIIs 6.8% and the public and others 8%.

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