UNIONBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | UNIONBANK | Market Cap | 1,22,802 Cr. | Current Price | 161 ₹ | High / Low | 205 ₹ |
| Stock P/E | 6.57 | Book Value | 168 ₹ | Dividend Yield | 2.96 % | ROCE | 6.31 % |
| ROE | 15.5 % | Face Value | 10.0 ₹ | DMA 50 | 172 ₹ | 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 | 38.0 | MACD | -4.91 | Volume | 87,45,525 | Avg Vol 1Wk | 89,52,786 |
| Low price | 125 ₹ | High price | 205 ₹ | PEG Ratio | 0.22 | Debt to equity | 10.8 |
| 52w Index | 44.8 % | Qtr Profit Var | 6.64 % | EPS | 24.5 ₹ | Industry PE | 7.84 |
📊 Core Financials
Revenue Growth: PAT improved (₹5,316 Cr vs ₹5,017 Cr), showing steady growth momentum.
Profit Margins: Margins modest, reflecting PSU banking sector dynamics.
Debt Ratios: Debt-to-equity 10.8, very high due to banking structure.
Cash Flows: Stable operating cash flows from core banking operations.
Return Metrics: ROCE 6.31%, ROE 15.5% — moderate efficiency, ROE stronger than ROCE.
💹 Valuation Indicators
P/E Ratio: 6.57, below industry average (7.84), indicating undervaluation.
P/B Ratio: ~0.96 (Price ₹161 / Book Value ₹168), near book value, attractive.
PEG Ratio: 0.22, very attractive relative to growth.
Intrinsic Value: Fair value closer to ₹170–175, current price undervalued.
Dividend Yield: 2.96%, strong for a PSU bank.
🏢 Business Model & Competitive Advantage
Operates in public sector banking, offering retail, corporate, and treasury services.
Competitive edge: government backing, wide branch network, and strong deposit base.
Challenges: high debt-equity structure, weaker profitability ratios compared to private peers, and cyclical credit risks.
📈 Entry Zone & Long-Term Guidance
Entry Zone: ₹150–160 (value zone near intrinsic).
Long-Term Holding: Suitable for dividend-seeking investors, with moderate growth potential.
✅ Positive
PAT improved (₹5,316 Cr vs ₹5,017 Cr).
Dividend yield 2.96% attractive.
P/E and P/B indicate undervaluation.
FII holdings increased (+1.23%).
⚠️ Limitation
ROCE (6.31%) relatively weak.
Debt-to-equity very high (10.8).
DII holdings decreased (-0.40%).
🚨 Company Negative News
RSI at 38.0 indicates weak momentum.
MACD negative (-4.91), showing bearish technical trend.
Efficiency ratios lag behind private sector peers.
🌟 Company Positive News
PAT growth momentum strong (+6.64%).
Strong FII confidence (+1.23%).
Dividend yield provides steady income.
52-week performance up 44.8%.
🏭 Industry
Banking industry driven by credit growth, deposit mobilization, and government policies.
Industry PE ~7.84, UNIONBANK trades at discount.
Growth drivers: financial inclusion, government support, and rising retail credit demand.
📌 Conclusion
UNIONBANK is a fundamentally stable PSU bank stock with undervaluation on earnings and book value, plus strong dividend yield. However, profitability ratios remain modest, and efficiency is weaker than private peers. Entry advisable near ₹150–160. Long-term holding suitable for investors seeking steady dividends and government-backed stability, with moderate growth potential.
Would you like me to prepare a peer comparison of UNIONBANK vs Bank of Baroda vs Punjab National Bank to highlight relative strengths and valuations?