Shares of Union Bank of India surged after three sessions of fall today. The banking stock zoomed 6.66% to Rs 67.3 against the previous close of Rs 63.10 on BSE. Currently, the stock is trading 3.9% away from the 52-week high of Rs 69.2. Union Bank of India shares are trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock of the lender has gained 42.26% in a year and risen 53.57% since the beginning of this year. In a month, the stock has surged 55%. Total 19.80 lakh shares of the firm changed hands amounting to a turnover of Rs 13.08 crore on BSE.
Market cap of Union Bank of India surged to Rs 45,621 crore in the afternoon session today. The large cap stock surged to a 52-week high of Rs 69.20 on November 11, 2022 and a 52 week low of Rs 33.55 on May 12, 2022.
In the second quarter of the current fiscal, net profit rose 21% to 1,848 crore in the quarter ended September 2022 from Rs 1,526 crore a year ago, on the back of strong loan growth despite a fall in other income.
Total advances rose 22% year-on-year with a 15% growth in retail, agriculture and MSME segments and a 22% rise in corporate loans led by segments like infrastructure, iron and steel, chemicals and NBFCs. Net interest income (NII) rose 22% to Rs 8,305 crore .
After the Q2 earnings, Motilal Oswal turned bullish on the stock with a target price of Rs 65, an 18% upside to the market price of Rs 55 on November 6, 2022.
“Loan growth has picked up well and has been broad based with focus to remain on further credit growth improvement. We estimate loans to grow at 12-13% over FY23-24 with an RoA/RoE at 0.8%/13.9%, respectively, by FY24. We maintain our BUY rating with a target price of Rs 65 (premised on 0.6x FY24E ABV),” said the financial services firm.
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