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UCO Bank shares zoom 47% in five sessions; time to buy, sell or hold?

UCO Bank shares zoom 47% in five sessions; time to buy, sell or hold?

UCO Bank stock hit a 52 week high of Rs 21.35 today, rising 14.11% against the previous close of Rs 18.71 on BSE.

UCO Bank share price today: In three sessions alone, the stock has surged 36% on the back of heavy volumes. It hit a hit a 52-week high of Rs 21.35, rising 12.64% on NSE UCO Bank share price today: In three sessions alone, the stock has surged 36% on the back of heavy volumes. It hit a hit a 52-week high of Rs 21.35, rising 12.64% on NSE

Shares of public sector lender UCO Bank are on a roll with the stock zooming nearly 47 per cent in the last five sessions. In three sessions alone, the stock has surged 36% on the back of heavy volumes. UCO Bank stock hit a 52 week high of Rs 21.35 today, rising 14.11% against the previous close of Rs 18.71 on BSE. The stock closed at Rs 14.54 on November 15, 2022. In five sessions, the stock has zoomed 46.83% and risen 68.37% in a month.

In the current trading session, the stock opened 3.15% higher at Rs 19.30. Shares of UCO Bank are trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. The rise in the stock price can be attributed to heavy volumes of shares traded on the bourses.

At 3:00 pm, 2.02 crore shares of the firm changed hands amounting to a turnover of Rs 42.02 crore on BSE. Market cap of the lender rose to Rs 24,952 crore. On NSE, 19.40 crore shares of the lender changed hands amounting to a turnover of Rs 400.70 crore.  Market cap of the firm rose to Rs 24,987.95 crore.

The shares of UCO Bank hit a 52-week high of Rs 21.35 , rising 12.64% intraday on NSE.

The turnover has been high in the previous two sessions too. On November 21, 16,682 trades took place on BSE with 1.77 crore shares changing hands amounting to a turnover of Rs 31.35 crore on BSE.  On November 18, 78.48 lakh shares changed hands amounting to a turnover of Rs 12.27 crore on BSE. 

The lender reported a more than two-fold rise in Q2 profit at Rs 505 crore against Rs 204.4 crore in the corresponding quarter of the  previous fiscal. Provisions fell over 50% to Rs 406 crore in Q2 against Rs 1,019 crore in the comparable quarter. The bank recorded a fall in fresh slippages. In the September quarter, Rs 578 crore worth loans turned NPAs as compared to the Rs 1500 crore quarterly average seen last fiscal. Advances rose 17% year-on-year to Rs 1.42 lakh crore at the end of September quarter. Total deposits climbed 10% to Rs 2.35 lakh crore.

On the outlook of the stock, Abhijeet from Tips2trade said, "Good Q2FY23 results due to growth in other income has led to one of the best quarterly profits for UCO Bank leading to this stock trading at a 52-week high. However, the stock is very overbought and investors are advised to book profits at current levels. Investors can re-enter only near  Rs 15.5- Rs 16.5 levels for higher targets of  Rs 21- Rs 23.5 in the near term."

Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking said, "Buying demand emerged from the major support area of Rs 10, the pullback rally thereon led prices to close marginally above the congestion zone thus offering a fresh entry opportunity with a favorable risk reward set up. It has recently generated a breakout above the downward-sloping trend line from 2014 onwards. Previously, there were multiple attempts to breach past the resistance zone of  Rs 18-19 but it failed to do so. Currently, the breakout seems genuine as the volume trend has shown an accumulation indicating an increased enthusiasm to push prices higher. Immediate resistance is seen around  Rs 23-23.50 as it happens to be the swing high of January 2019, successive breach of which might extend the rally further towards  Rs 32-33 in the near term. However, on the oscillator front, the stock is citing an overbought price condition which might be a cause of concern in the short term."

Manoj Dalmia, founder and director, Proficient Equities said, "UCO Bank has seen high volumes in the last week. It can face some resistance at current levels at Rs 22.50. Investors can buy it at closing above Rs 24.35 with a target of Rs 37.25. Investors should be careful about the volume spike it is seeing and enter based on the risk appetite."

Ravi Singh, Vice President and head of research, Share India said, "UCO Bank has rallied after posting strong Q2 earnings with a reduction in NPAs. The loan growth has jumped by double digits. Going ahead, Indian banks will gain from tailwind of rising rates as credit growth stays steady and will be a growth propeller in the rest of the fiscal year, after high credit growth and stronger margins helped boosting earnings. On technical setup, UCO Bank share price is holding strong with high volumes on daily and weekly chart. As per the momentum indicators, it may touch the target of Rs 25-28 levels in the near term."

Jitendra Upadhyay, Sr Research analyst at Bonanza Portfolio said, "UCO Bank has reported strong loan growth of 17% YoY during Q2FY23 on the back of the strong growth in retail loan book growth more than 12% YoY as loan book growth sharply come across retail book such as home loans,Car loans and personal loans are growing more than 16%. As management is focused on growing retail deposit as we have seen cost of deposit have declined in Q2FY23. Going forward NIM will improve due to bank focuses on floating rate loans. Asset quality Improved to 6.58% during Q2FY23 as against 7.42% in Q1FY23 on QoQ basis asset quality trends have better than expected due to high recoveries in written off and up gradation and kept credit cost under controlled. PSU Banks are trading at a P/B of 1.1x, 26% premium to its historical average of 0.9x."
 

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Published on: Nov 22, 2022, 3:49 PM IST
Posted by: Priya Raghuvanshi, Nov 22, 2022, 3:45 PM IST