CUB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | CUB | Market Cap | 21,005 Cr. | Current Price | 284 ₹ | High / Low | 305 ₹ |
| Stock P/E | 17.4 | Book Value | 134 ₹ | Dividend Yield | 0.70 % | ROCE | 6.86 % |
| ROE | 12.6 % | Face Value | 1.00 ₹ | DMA 50 | 275 ₹ | DMA 200 | 234 ₹ |
| Chg in FII Hold | -2.47 % | Chg in DII Hold | 3.48 % | PAT Qtr | 329 Cr. | PAT Prev Qtr | 306 Cr. |
| RSI | 50.9 | MACD | 2.99 | Volume | 17,59,493 | Avg Vol 1Wk | 26,64,143 |
| Low price | 143 ₹ | High price | 305 ₹ | PEG Ratio | 1.25 | Debt to equity | 7.22 |
| 52w Index | 87.0 % | Qtr Profit Var | 15.2 % | EPS | 16.3 ₹ | Industry PE | 15.8 |
📊 Financials: City Union Bank Ltd. (CUB) has shown steady profitability with PAT at 329 Cr compared to 306 Cr previously, reflecting a 15.2% quarterly profit variation. ROE at 12.6% is moderate, while ROCE at 6.86% indicates limited efficiency. Debt-to-equity ratio of 7.22 is high, typical for banks, but manageable within the sector. EPS of 16.3 ₹ supports earnings visibility, though efficiency metrics remain modest.
💹 Valuation: Current P/E of 17.4 is slightly above the industry average (15.8), suggesting fair valuation with a mild premium. P/B ratio ~2.12 (Price 284 ₹ / Book Value 134 ₹) is reasonable for the banking sector. PEG ratio of 1.25 indicates fair valuation relative to growth. Dividend yield of 0.70% provides modest income support. Intrinsic value appears aligned with current price, offering stability.
🏢 Business Model: CUB operates as a private sector bank with focus on SME lending, retail banking, and treasury operations. Competitive advantage lies in its regional presence, strong SME customer base, and conservative risk management. However, growth is constrained compared to larger peers.
📈 Entry Zone: Attractive accumulation zone between 270–280 ₹, close to DMA50 (275 ₹) and above DMA200 (234 ₹). RSI at 50.9 indicates neutral momentum, while MACD (2.99) suggests mild bullishness. Long-term investors can accumulate gradually near support levels.
🔒 Holding Guidance: Fundamentally stable with consistent profit growth and fair valuation. Suitable for long-term holding, though investors should monitor asset quality and efficiency improvements.
Positive
- Steady quarterly PAT growth (15.2%).
- Moderate ROE (12.6%) supports shareholder value creation.
- P/B ratio of 2.12 is reasonable for the sector.
- DII holdings increased (+3.48%), reflecting strong domestic confidence.
Limitation
- ROCE (6.86%) indicates limited efficiency.
- High debt-to-equity ratio (7.22), typical for banks but adds leverage risk.
- P/E (17.4) slightly above industry average (15.8), suggesting mild premium valuation.
- FII holdings decreased (-2.47%), showing foreign caution.
Company Negative News
- No major negative news reported, but efficiency metrics remain modest and foreign investor sentiment has weakened.
Company Positive News
- Consistent profit growth with quarterly PAT improvement.
- Strong domestic institutional confidence with DII increase.
- Stable valuation aligned with intrinsic value.
Industry
- Banking sector benefits from rising credit demand and economic expansion.
- Industry P/E at 15.8 suggests moderate optimism.
- Private sector banks continue to gain market share in SME and retail lending.
Conclusion
✅ City Union Bank Ltd. is financially stable with consistent profit growth and fair valuation. While efficiency metrics are modest and leverage is high, strong domestic confidence and reasonable valuation make it suitable for long-term holding. Accumulation near 270–280 ₹ is recommended for margin of safety.
I can also extend this with a peer comparison against Federal Bank, Karur Vysya Bank, and South Indian Bank to highlight CUB’s relative valuation and efficiency. Would you like me to add that?