UNIONBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | UNIONBANK | Market Cap | 1,26,672 Cr. | Current Price | 166 ₹ | High / Low | 205 ₹ |
| Stock P/E | 6.77 | Book Value | 168 ₹ | Dividend Yield | 2.86 % | ROCE | 6.31 % |
| ROE | 15.5 % | Face Value | 10.0 ₹ | DMA 50 | 179 ₹ | DMA 200 | 162 ₹ |
| Chg in FII Hold | 1.23 % | Chg in DII Hold | -0.40 % | PAT Qtr | 5,316 Cr. | PAT Prev Qtr | 5,017 Cr. |
| RSI | 36.6 | MACD | -2.36 | Volume | 1,84,14,984 | Avg Vol 1Wk | 2,48,62,050 |
| Low price | 113 ₹ | High price | 205 ₹ | PEG Ratio | 0.22 | Debt to equity | 10.8 |
| 52w Index | 57.4 % | Qtr Profit Var | 6.64 % | EPS | 24.5 ₹ | Industry PE | 7.99 |
📊 UNIONBANK shows moderate fundamentals. ROE (15.5%) is healthy, but ROCE (6.31%) remains weak compared to peers, reflecting limited efficiency. EPS of 24.5 ₹ supports earnings visibility, and quarterly PAT improved (5,316 Cr. vs 5,017 Cr.), showing steady growth. Dividend yield of 2.86% adds investor appeal. However, debt-to-equity ratio of 10.8 highlights heavy leverage typical of PSU banks. Valuation is reasonable with P/E at 6.77 compared to industry average of 7.99, while PEG ratio of 0.22 suggests undervaluation relative to growth. Technical indicators (RSI 36.6, MACD -2.36) show oversold conditions and weak momentum, with price trading below 50 DMA (179 ₹) but near 200 DMA (162 ₹).
💡 Entry Price Zone: Attractive accumulation between 155 ₹ – 165 ₹ near 200 DMA support. Buying above 175 ₹ carries short-term risk.
📈 Long-Term Holding Guidance: UNIONBANK is moderately attractive for medium-to-long-term investors (2–4 years). Holding is justified if profitability sustains and efficiency metrics improve. Conservative investors should monitor leverage and institutional flows before committing heavily.
Positive
- Healthy ROE (15.5%) supports profitability.
- EPS of 24.5 ₹ provides earnings visibility.
- Dividend yield of 2.86% adds investor appeal.
- Quarterly PAT improved (5,316 Cr. vs 5,017 Cr.).
- FII holdings increased (+1.23%), showing foreign investor confidence.
Limitation
- Weak ROCE (6.31%) compared to peers.
- High debt-to-equity ratio (10.8) indicates heavy leverage.
- RSI (36.6) shows oversold conditions, reflecting weak momentum.
- DII holdings decreased (-0.40%), showing reduced domestic confidence.
Company Negative News
- High leverage compared to industry benchmarks.
- Domestic institutional investors reduced holdings.
Company Positive News
- Quarterly profit variation (+6.64%) highlights growth momentum.
- Foreign institutional investors increased holdings significantly.
Industry
- Industry PE at 7.99, while UNIONBANK trades at 6.77, suggesting undervaluation.
- Banking sector remains cyclical, dependent on credit growth, asset quality, and interest rate environment.
Conclusion
✅ UNIONBANK is a moderately attractive candidate with improving profitability, decent dividend yield, and undervaluation relative to peers. However, weak efficiency metrics and high leverage limit its long-term appeal. Best suited for medium-term investors who accumulate near support levels and exit on rallies unless ROE and growth metrics improve significantly.
Would you like me to extend this into a public sector bank peer overlay HTML (e.g., Union Bank vs Bank of Baroda, Canara Bank, and Indian Bank) to highlight relative valuation and efficiency positioning?