This Midcap Bank Stock Has Fallen 12.9% In A Week, HDFC Securities Says "Buy" For 66% Upside

HDFC securities has placed a "Buy" on the City Union Bank with a target of Rs 230/share. If you buy the stock at the current market price today, it could fetch a potential return of up to 67%. City Union Bank is a private sector Midcap bank having a market capitalisation of Rs 10,343.09 crore. Check below to know more:

Stock Outlook, Returns, 52 week Low/High

The current share price of City Union Bank on NSE is Rs 138.90/share, trading 2.97% up from its previous close of Rs 134.75/share. Its current market price is trading 27.9% up from its 52 week low of Rs 108.60/share, which it recorded on 7 March 2022. The 52 week high of the stock is Rs 204.95/share, recorded on 15 December 2022.

It has fallen 12.9% in the last 1 week, 15.38% in the last 1 month and 24.32% in the last 3 months, respectively. The stock has given 5.67% positive return in the past 1 year. It declined 36.6% in the past 3 years and 6.98% in the past 5 years.

 

HDFC Securities recommends "Buy" for a Target Price of Rs 230/share

According to the brokerage, Despite stable loan growth and higher recoveries from written-off accounts, City Union Bank's (CUBK) Q3FY23 earnings missed estimates due to massive interest reversals and higher credit costs (2.2% annualised). Slippages were elevated (~4.4%), largely from the RBI-identified divergent pool (INR2.6bn), driving up GNPA to 4.6%. Management revised its loan growth guidance a tad lower than earlier expectations of 15-18% on account of a delayed rebound in the MSME investment cycle. The lag in the pace of deposit mobilisation is likely to be an overhang on loan growth, translating into a higher equity mix on the balance sheet, keeping RoEs in check. "We tweak our FY23 numbers to factor in the impact of reported divergence and a relatively conservative growth stance in the medium term; maintain BUY, with a TP of INR230 (2.1x Sep-24 ABVPS)," the brokerage has said.

 

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.