Union Bank’s stock surged by 3.4% to ₹124.28 at 9:25 AM on the NSE, following an upgrade by Investec, which raised its rating to ‘Buy’ with a target price of ₹151 per share. The bank’s stock had corrected nearly 30% over the past 3.5 months due to concerns about higher corporate asset quality stress, slower deposit growth across the banking system, and regulatory challenges that weighed on the sector’s performance.
Investec emphasized that at 0.8x P/B and a 3.8% dividend yield, Union Bank is now trading close to its historical average, presenting a strong margin of safety. The bank’s core pre-provision operating profit (PPOP) is superior to its peers, which provides it with enough buffer to absorb higher credit costs. This upgrade reflects confidence in the bank’s valuation and long-term growth prospects, prompting the stock’s upward movement.
