UNIONBANK - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.3

🏦 Fundamental Analysis of Union Bank of India (UNIONBANK)

✅ Strengths

Attractive Valuation

P/E: 5.39 vs Industry PE: 7.49 — undervalued

PEG Ratio: 0.11 — suggests strong earnings growth at a low price

EPS: ₹24.6 — solid earnings base

Book Value: ₹149 vs Price: ₹133 — trading below book, value buy

Strong Profitability

ROE: 17.0% — excellent for a PSU bank

PAT Qtr: ₹4,428 Cr vs ₹5,011 Cr — slight dip, but YoY growth of 21.6%

Dividend Yield: 3.58% — attractive for income investors

Institutional Interest

FII Hold ↑ 0.59%

DII Hold ↑ 0.30% — positive sentiment from large investors

High Volume

Volume > 1-week average — active trading, liquidity support

⚠️ Concerns

Technical Weakness

RSI: 31.2 — oversold zone, may signal short-term weakness

MACD: -2.66 — bearish momentum

Price below DMA 50 (₹142) and near DMA 200 (₹131) — trend reversal risk

ROCE: 6.72% — low due to asset-heavy nature of banking

Debt-to-Equity: 11.8 — typical for banks, but worth noting for risk-sensitive investors

52w Index: 55.2% — underperformance relative to 52-week high

📉 Ideal Entry Price Zone

Entry Zone: ₹125–₹132

Near DMA 200 and RSI support

Offers value and technical support for long-term accumulation

🧭 Long-Term Investment Outlook

Union Bank is a strong candidate for long-term investment, especially for value-focused investors. Its low valuation, strong ROE, and improving profitability make it attractive in the PSU banking space.

Holding Period: 2–4 years

Ideal for long-term compounding as PSU banks continue to re-rate

Reassess if ROE drops below 12% or NPA trends worsen

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹155–₹160

Near 52-week high and resistance zone

Full Exit

If ROE drops below 12% for 2+ quarters

If PEG ratio rises above 1.0 without earnings growth

If price breaks below ₹120 and fails to recover

Reinvest: On dips near ₹125 if fundamentals remain intact

Would you like a comparison with other PSU banks like Bank of Baroda, Canara Bank, or SBI to identify the best value and growth mix?

Edit in a page