Accumulate Union Bank, target of Rs 170: Emkay
Emkay Global Financial Services has downgraded its rating on Union Bank of India to accumulate from buy with a price target of Rs 170 in its May 08, 2009 research report.
“Union Bank of India’s (UBI) reported net profit of Rs 4.7 billion for Q4FY09, decline of 10.8% yoy. Although, earnings were better than expected, the operating performance was weaker with NII down 18% qoq and NIMs down 77bps qoq. However, other income reported a strong growth of 50.0% yoy driven by strong treasury income. The asset quality deteriorated sharply during the quarter as the GNPA and NNPA rose by 23.0% and 158.0% sequentially to Rs 19.2 billion and Rs 3.3 billion. However, the bank’s assets under restructuring (including pending applications) stood at Rs 37.0 billion, aggregating 3.7% of the overall advances, lower than industry average. The stock is currently trading at 1.0x FY10E ABV and 0.8x FY11E ABV. We downgrade the stock to accumulate from ‘BUY’ with price target of Rs 170 (Rs 190 earlier),” says Emkay Global Financial Services’ report.
Tags: Accumulate Union Bank, brokerage tips, buy rating, india stocks, NSE Tips, union bank
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