⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
UCOBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | UCOBANK | Market Cap | 35,750 Cr. | Current Price | 28.5 ₹ | High / Low | 43.6 ₹ |
| Stock P/E | 13.6 | Book Value | 26.5 ₹ | Dividend Yield | 1.37 % | ROCE | 5.76 % |
| ROE | 8.38 % | Face Value | 10.0 ₹ | DMA 50 | 29.5 ₹ | DMA 200 | 31.9 ₹ |
| Chg in FII Hold | 0.00 % | Chg in DII Hold | -0.10 % | PAT Qtr | 740 Cr. | PAT Prev Qtr | 620 Cr. |
| RSI | 43.1 | MACD | -0.19 | Volume | 63,94,141 | Avg Vol 1Wk | 66,33,990 |
| Low price | 26.8 ₹ | High price | 43.6 ₹ | PEG Ratio | 0.36 | Debt to equity | 10.1 |
| 52w Index | 10.1 % | Qtr Profit Var | 15.8 % | EPS | 2.09 ₹ | Industry PE | 7.64 |
📊 Core Financials
- Revenue Growth: Quarterly PAT improved from 620 Cr. to 740 Cr., showing positive momentum.
- Profit Margins: EPS at 2.09 ₹ reflects modest profitability.
- Debt Ratios: Debt-to-equity at 10.1, very high leverage typical of banks but adds financial risk.
- Cash Flows: Likely positive given profitability, but efficiency remains low.
- Return Metrics: ROCE at 5.76% and ROE at 8.38% are weak, highlighting limited capital efficiency.
💹 Valuation Indicators
- P/E Ratio: 13.6, higher than industry average (7.64), suggesting overvaluation relative to peers.
- P/B Ratio: ~1.07 (Current Price / Book Value), fair but not cheap.
- PEG Ratio: 0.36, indicates valuation is attractive relative to growth prospects.
- Intrinsic Value: Current price (28.5 ₹) trades below DMA 50 (29.5 ₹) and DMA 200 (31.9 ₹), signaling bearish sentiment.
🏢 Business Model & Competitive Advantage
- UCOBANK operates in public sector banking, with government backing providing stability.
- Competitive advantage lies in branch network and regulatory support, but profitability lags private peers.
- High leverage and weak return ratios limit long-term attractiveness.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near 26–28 ₹, close to support levels.
- Long-Term Holding: Risky unless efficiency improves. Suitable only for conservative investors seeking exposure to PSU banking with modest dividend yield.
Positive
- Quarterly PAT improved from 620 Cr. to 740 Cr.
- Dividend yield at 1.37% provides shareholder return.
- PEG ratio at 0.36 suggests valuation is attractive relative to growth.
Limitation
- High debt-to-equity ratio (10.1) increases financial risk.
- ROCE (5.76%) and ROE (8.38%) remain weak.
- P/E ratio higher than industry average, suggesting overvaluation.
Company Negative News
- DII holdings decreased (-0.10%), showing reduced domestic institutional support.
- Stock trading below DMA 50 and DMA 200, reflecting bearish sentiment.
Company Positive News
- Quarterly PAT growth of 15.8% indicates operational improvement.
- Stable FII holdings show neutral foreign investor stance.
Industry
- Banking industry trades at P/E of 7.64, much lower than UCOBANK’s valuation.
- Sector benefits from credit growth and government support, but PSU banks face efficiency challenges.
Conclusion
- UCOBANK shows improving profitability but weak efficiency and high leverage.
- Valuation is stretched compared to industry, limiting upside potential.
- Best suited for conservative investors seeking PSU banking exposure, with entry near 26–28 ₹ offering better risk-reward.
I can also prepare a PSU banking peer comparison HTML table (UCOBANK vs Bank of India, Central Bank, Indian Bank) to highlight relative valuation and efficiency metrics if you’d like.