Shares of City Union Bank (NSE: CUB) have surged by 10%, currently trading at ₹165.69, and are now locked in the upper circuit as of 9:24 AM. The sharp rise in the stock follows strong brokerage outlooks and a solid Q2 FY25 performance that has captured investor interest.
- Macquarie recently assigned an ‘Outperform’ rating with a target price of ₹185, indicating a potential 23% upside. Macquarie praised the bank’s Q2 FY25 earnings, which were in line with expectations, marking a pivotal moment in the bank’s growth. Despite rising credit costs, the brokerage expects City Union Bank’s Return on Assets (ROA) to stabilize at 1.5%-1.6%, enhancing its risk/reward profile.
- Investec initiated a ‘Buy’ rating with a target price of ₹200, suggesting a 33% upside. Investec emphasized City Union Bank’s better-than-expected performance in growth, profitability, and asset quality during Q2 FY25. The bank’s Liquidity Coverage Ratio (LCR) increased from 106% in Q1 FY25 to 120% in Q2, while Net Interest Margins (NIMs) improved sequentially.
Both brokerage firms highlight the bank’s positioning with a secured loan portfolio, better asset quality, and enhanced margins. As a result, the stock has seen a surge in demand, pushing it into the upper circuit today.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. Please consult a financial advisor before making any investment decisions.
