Union Bank shares rose 102% from 52-week low in a year; more upside ahead?
Union Bank of India shares, which fell to a yearly low of Rs 51.30 on November 2, 2022, were trading at Rs 103.50 in today's session on BSE
- Nov 1, 2023,
- Updated Nov 1, 2023 4:38 PM IST
Shares of Union Bank of India Ltd have doubled from their 52-week low hit in November last year. The stock of the public sector bank surged 102% against a 3.44% rally in Nifty Bank during the period. Union Bank of India shares, which fell to a yearly low of Rs 51.30 on November 2, 2022, were trading at Rs 103.50 in today's session on BSE. The stock clocked 95% returns in a year, making it among the top performers in the PSU bank space.
The stock has a PE of 6.44 , signaling it is undervalued compared to the sectoral PE of 11.10. It has a price to book ratio of 1.05.
Union Bank stock ended 1.52% higher at Rs 103.20 on BSE. The stock opened flat at Rs 101.80. It hit an intraday high of Rs 104.35 on BSE. Total 19.52 lakh shares of the bank changed hands amounting to a turnover of Rs 20.09 crore on BSE. Market cap of the bank rose to Rs 76,496 crore.
Union Bank has a one-year beta of 1.7, indicating high volatility during the period.
In terms of technicals, the relative strength index (RSI) of the stock stands at 53.2, signaling the stock is neither oversold nor overbought. Union Bank shares are trading higher than the 10 day, 20 day, 50 day, 100 day, 200 day moving averages
Motilal Oswal has a target price of Rs 125 for the lender in a year.
“We increase our FY24/25E earnings estimates by 7%/8% and estimate RoA/RoE of 1.1%/17.5% by FY25. We retain our BUY rating on the stock with a TP of INR125.
Emkay Global has revised its target price to Rs 105 from the earlier Rs 95 post Q2 earnings.
“We hoist up FY24-26E earnings by 8-11% and expect the bank to deliver healthy RoA/RoE of 1%/15-17%. Currently, we maintain a HOLD on the stock and value it at 0.8x Sep-25E P/ABV, with new target price of Rs 105/share (Rs 95 earlier). Our preferred picks in midcap PSB space remain Indian Bank and Canara Bank,” said the brokerage.
Progressive Shares is bullish on the stock with targets of Rs 135 and Rs 168.
Listing out the brokerage’s technical Diwali picks, Aditya Gaggar, director of Progressive shares said, "Consolidation of 5 years came to an end with a Rounding Bottom Formation which was confirmed with the breakout in the PSU banking sector. During the month, the stock has given a pullback and is now set to move in the direction of the pattern breakout. All the indicators are showing presence of a strong uptrend. One can buy the stock at the current market price or on declines towards Rs 96."
The lender reported a massive 90% rise in its net standalone profit to Rs 3,511 crore in the September 2023 quarter against a profit of Rs 1,847.7 crore in the September quarter of 2022.
Net NPAs fell to 1.30% in Q2 from 2.64% in the year-ago period. Net interest income rose 9.89% on a YoY basis in the September 2023 quarter. Gross advances climbed 9.50% YoY and total deposits grew 9.04% YoY.
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Shares of Union Bank of India Ltd have doubled from their 52-week low hit in November last year. The stock of the public sector bank surged 102% against a 3.44% rally in Nifty Bank during the period. Union Bank of India shares, which fell to a yearly low of Rs 51.30 on November 2, 2022, were trading at Rs 103.50 in today's session on BSE. The stock clocked 95% returns in a year, making it among the top performers in the PSU bank space.
The stock has a PE of 6.44 , signaling it is undervalued compared to the sectoral PE of 11.10. It has a price to book ratio of 1.05.
Union Bank stock ended 1.52% higher at Rs 103.20 on BSE. The stock opened flat at Rs 101.80. It hit an intraday high of Rs 104.35 on BSE. Total 19.52 lakh shares of the bank changed hands amounting to a turnover of Rs 20.09 crore on BSE. Market cap of the bank rose to Rs 76,496 crore.
Union Bank has a one-year beta of 1.7, indicating high volatility during the period.
In terms of technicals, the relative strength index (RSI) of the stock stands at 53.2, signaling the stock is neither oversold nor overbought. Union Bank shares are trading higher than the 10 day, 20 day, 50 day, 100 day, 200 day moving averages
Motilal Oswal has a target price of Rs 125 for the lender in a year.
“We increase our FY24/25E earnings estimates by 7%/8% and estimate RoA/RoE of 1.1%/17.5% by FY25. We retain our BUY rating on the stock with a TP of INR125.
Emkay Global has revised its target price to Rs 105 from the earlier Rs 95 post Q2 earnings.
“We hoist up FY24-26E earnings by 8-11% and expect the bank to deliver healthy RoA/RoE of 1%/15-17%. Currently, we maintain a HOLD on the stock and value it at 0.8x Sep-25E P/ABV, with new target price of Rs 105/share (Rs 95 earlier). Our preferred picks in midcap PSB space remain Indian Bank and Canara Bank,” said the brokerage.
Progressive Shares is bullish on the stock with targets of Rs 135 and Rs 168.
Listing out the brokerage’s technical Diwali picks, Aditya Gaggar, director of Progressive shares said, "Consolidation of 5 years came to an end with a Rounding Bottom Formation which was confirmed with the breakout in the PSU banking sector. During the month, the stock has given a pullback and is now set to move in the direction of the pattern breakout. All the indicators are showing presence of a strong uptrend. One can buy the stock at the current market price or on declines towards Rs 96."
The lender reported a massive 90% rise in its net standalone profit to Rs 3,511 crore in the September 2023 quarter against a profit of Rs 1,847.7 crore in the September quarter of 2022.
Net NPAs fell to 1.30% in Q2 from 2.64% in the year-ago period. Net interest income rose 9.89% on a YoY basis in the September 2023 quarter. Gross advances climbed 9.50% YoY and total deposits grew 9.04% YoY.
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