Union Bank share price: Buy, hold or sell this PSU bank post Q3 results?
Emkay Global said Union Bank managed to report a 11 per cent PAT beat at Rs 5,017 crore, mainly due to lower provisions.
- Jan 15, 2026,
- Updated Jan 15, 2026 10:59 AM IST
Union Bank of India reported a higher-than-expected net profit for the December quarter, even as its overall credit growth remained subdued at 8 per cent year on year (YoY). A few brokerages have raised their target prices on the stock but maintained their ‘Neutral’ or ‘Reduce’ ratings.
Emkay Global said Union Bank managed to report a 11 per cent PAT beat at Rs 5,017 crore, mainly due to lower provisions, as banks paused to build provisions towards ECL in Q3. Going forward, the management has guided to accelerate credit growth, led by the retail, agriculture, and MSME (RAM) segment, it noted.
Emkay Global said Union Bank has strategically shed bulk deposits, leading to lower cost of funding (CoF) and thus 9 basis points sequentially margin improvement, but it believes core deposit growth remains a challenge for the bank, which could keep margins in check amid another repo rate cut expected in Q4.
"Overall NPA ratios are trending down, given contained fresh slippages and continued recovery in the corporate pool, but we believe the bank needs to accelerate ECL provisions. Factoring in Q3 earnings beat and better growth guidance, we raise our FY26-28E earnings by 1-8 per cent. We also lift our target by 14 per cent to Rs 160 (from Rs 140) on factoring in earnings upgrade," it said.
MOFSL said Union Bank's earnings beat was driven by an net interest margin (NIM) expansion and lower credit costs. Loan growth regained momentum in Q3 after a subdued H1, while deposit growth remained muted due to the bank’s conscious run-down of bulk deposits, it said.
The management has guided for a stronger loan growth outlook going forward.
MOFSL said Union Bank's margins came in above expectations as the bank prioritised profitability over growth, allowing bulk deposits to continue declining. "With the revival in loan growth gaining traction and visibility improving, the growth outlook has strengthened further. Asset quality metrics continued to improve, supported by lower slippages and controlled credit costs," it said.
The brokerage has suggested a revised target of Rs 180 on the stock. It kept its 'Neutral' rating intact. "We expect loans to post a 9 per cent CAGR over FY25-27E. We reiterate our Neutral rating on the stock with a revised target price of Rs 180 (1x FY27E ABV)," it said.
Union Bank of India reported a higher-than-expected net profit for the December quarter, even as its overall credit growth remained subdued at 8 per cent year on year (YoY). A few brokerages have raised their target prices on the stock but maintained their ‘Neutral’ or ‘Reduce’ ratings.
Emkay Global said Union Bank managed to report a 11 per cent PAT beat at Rs 5,017 crore, mainly due to lower provisions, as banks paused to build provisions towards ECL in Q3. Going forward, the management has guided to accelerate credit growth, led by the retail, agriculture, and MSME (RAM) segment, it noted.
Emkay Global said Union Bank has strategically shed bulk deposits, leading to lower cost of funding (CoF) and thus 9 basis points sequentially margin improvement, but it believes core deposit growth remains a challenge for the bank, which could keep margins in check amid another repo rate cut expected in Q4.
"Overall NPA ratios are trending down, given contained fresh slippages and continued recovery in the corporate pool, but we believe the bank needs to accelerate ECL provisions. Factoring in Q3 earnings beat and better growth guidance, we raise our FY26-28E earnings by 1-8 per cent. We also lift our target by 14 per cent to Rs 160 (from Rs 140) on factoring in earnings upgrade," it said.
MOFSL said Union Bank's earnings beat was driven by an net interest margin (NIM) expansion and lower credit costs. Loan growth regained momentum in Q3 after a subdued H1, while deposit growth remained muted due to the bank’s conscious run-down of bulk deposits, it said.
The management has guided for a stronger loan growth outlook going forward.
MOFSL said Union Bank's margins came in above expectations as the bank prioritised profitability over growth, allowing bulk deposits to continue declining. "With the revival in loan growth gaining traction and visibility improving, the growth outlook has strengthened further. Asset quality metrics continued to improve, supported by lower slippages and controlled credit costs," it said.
The brokerage has suggested a revised target of Rs 180 on the stock. It kept its 'Neutral' rating intact. "We expect loans to post a 9 per cent CAGR over FY25-27E. We reiterate our Neutral rating on the stock with a revised target price of Rs 180 (1x FY27E ABV)," it said.