Mehabe score: 4 G Factor: 6 Piotski Score: 6 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 6 and Piotski score of 6.
Description
Union Bank of India is engaged in the Business of Banking Services, Government Business ,Merchant Banking, Agency Business Insurance, Mutual Funds, Wealth Management etc.#
Main Points
Ratios (Q3FY21)
Capital Adequacy Ratio – 12.98%
Net Interest Margin – 2.94%#
Gross NPA – 13.49%
Net NPA – 3.27%
CASA Ratio – 35.38%Site:UNIONBANKMain Symbol:UNIONBANK
Stock trades at 36.8, below its 50dma 37.04. However it is trading above its 200dma 34.93. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 37.04.
The 52 week high is at 45.25 and the 52week low is at 23.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.74 times its book value
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
– has a low return on equity of -3.52% for last 3 years.
-Contingent liabilities of Rs.210795.63 Cr.
-Earnings include an other income of Rs.13899.08 Cr.
Competition
– The industry trades at a mean P/E of 14.6x. I O B trades at the industry’s max P/E of 59.45x. UNIONBANK trades at a P/E of 8.77x
– Industry’s mean G-Factor is 5.0 while the mean Piotski score is 8.0. UNIONBANK has a G-Factor of 6 and Piotski scoreof 6.
– Average 1 month return for industry is 2.1%. The max 1- month return was given by I O B: a return of 29.14 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 15622.0 cr compared to Rs 9363.0 cr for period ended Mar 2020, a rise of 66.8%
Operating Profits reported at Rs 9612.0 cr for period ended Mar 2021 vis-vis 6000.0 for period ended Mar 2020 .
Operating Margins contracted -255.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.98 compared to Rs 1.12 for previous quarter ended Dec 2020 and Rs -7.93 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 69311.0 cr for period ended Mar 2021 vis-vis sales of Rs 37479.0 cr for the period ended Mar 2020, a healthy growth of 45.9%. The 3 year sales cagr stood at 28.1%.
Operating margins shrank to -10664.0% for period ended Mar 2021 vis-vis -9519.0% for period ended Mar 2020, contraction of 114500.0 bps.
Net Profit reported at Rs 2863.0 cr for period ended Mar 2021 vis-vis sales of Rs -3121.0 cr for the period ended Mar 2020, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 205.0 cr for period ended Mar 2021 vis-vis Rs -77.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to -4.0% over the last 3 Years. – The stock has given a return of 15% on a 1 Year basis vis-vis a return of -22% over the last 3 Years. – The compounded sales growth on a TTM bassis is 85% vis-vis a compounded sales growth of 28% over the last 3 Years. – The compounded profit growth on a TTM basis is 192% vis-vis a compounded profit growth of 37% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.66% vis-vis 0.66% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 5.9% vis-vis 5.69% for Dec 2020
Conclusion
– Stock is trading at 0.74 times its book value
– is expected to give good quarter – has low interest coverage ratio.
– has a low return on equity of -3.52% for last 3 years.
-Contingent liabilities of Rs.210795.63 Cr.
-Earnings include an other income of Rs.13899.08 Cr.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains below its 50 DMA 37.04 and is trading at 36.8. Shows a near term lack of buying interest.
