UCOBANK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.5

📊 Core Financials Overview

Profitability

ROE: 8.38% and ROCE: 5.76% — modest, below top-tier banking benchmarks.

EPS: ₹2.04, with PAT dipping slightly from ₹652 Cr. to ₹607 Cr. — a 10.2% decline, though still profitable.

Debt-to-equity: 10.2 — typical for banks due to deposit liabilities, but signals high leverage.

Dividend Yield: 1.29% — decent for a PSU bank, offering passive income.

Institutional Sentiment

FII holding dropped (-0.31%) and DII holding declined (-0.62%) — cautious stance from institutions.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 15.2 Above industry average (7.91) — mildly overvalued.

P/B Ratio ~1.19 Reasonable for a public sector bank.

PEG Ratio 0.40 Attractive — suggests undervaluation relative to growth.

Intrinsic Value ~₹28–₹30 (est.) Current price of ₹30.3 is near fair value.

🧠 Business Model & Competitive Edge

Core Operations: Retail and corporate banking, treasury, and digital services.

Strengths

Government backing ensures systemic stability.

Strong quarterly volumes and consistent profitability.

Challenges

Low return metrics and high leverage.

EPS remains modest despite high trading volumes.

📈 Technicals & Entry Guidance

DMA 50: ₹29.7, DMA 200: ₹34.5 — price is below long-term average, signaling potential value.

RSI: 63.7 — approaching overbought territory.

MACD: 0.17 — mild bullish momentum.

📌 Entry Zone: ₹27–₹29 — ideal for accumulation on dips.

🕰️ Long-Term Holding Guidance

2025 Target: ₹37.06–₹52.68 depending on macro conditions

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2026–2027 Target: ₹54.13–₹106.45 with bullish momentum

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Holding Strategy: Suitable for long-term investors seeking exposure to PSU banking recovery. Accumulate during technical weakness and monitor quarterly earnings and asset quality trends.

You can explore projected targets and technical breakdowns on Dailybulls’ forecast page.

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dailybulls.in

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