Motilal Oswal has given Buy recommendation for Union Bank of India recommended buy rating on the stock with a target price of Rs 50 in its researc with a target price of Rs. 50 in its research report issued on May 13, 2022
Motilal Oswal’s research report on Union Bank of India
Union Bank of India (UNBK) reported 8% YoY growth in net earnings in 4QFY22 supported by higher treasury gains, lower opex and tax rate. PPoP grew 11% YoY to INR55.2b. While headline asset quality, GNPA/NNPA, improved 51bp/41bp QoQ, respectively, fresh slippages rose 66% QoQ to ~3.7% annualized led by a large corporate account of INR17.2b. UNBK carries 59% provision on the same.
We cut our PAT estimates by 17% and 13% for FY23 and FY24, respectively, on lower other income (rising bond yields) and estimate an RoA/RoE of 0.7%/12.4% for UNBK in FY24. Maintain BUY with a TP of INR50.