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 research with a target price of Rs. 50 in its research report issued on Jul 26, 2022

Motilal Oswal’s research report on Union Bank of India

Union Bank of India (UNBK) reported a strong 32% YoY growth in PAT at INR15.6b (25% beat) driven by higher NII and other income while provisions and opex came in higher than our estimates. Fresh slippages saw a sequential moderation, which coupled with high write-offs and healthy recoveries and upgrades resulted in an improvement in asset quality ratios. Restructuring book remained at 2.92% of loans. We raise our PAT estimates by 9% and 3% for FY23E and FY24E on higher other income and estimate RoA/RoE at 0.7%/12.3% by FY24E, respectively.

Outlook

Maintain BUY with a TP of INR50 (premised on 0.6x FY24E ABV).

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