ICICI Securities has given City Union Bank a ‘BUY’ rating with a target price of ₹200. The bank's growth is b, with a 35% upside potential. Despite market downturns, this stock is attractive for investment.
Stock to Buy: The domestic stock market has witnessed a downturn in recent months. On September 26, 2024, Nifty 50 and Sensex reached their record highs, but since then, the market has been in correction mode. US President Donald Trump's tariff policies, significant selling by Foreign Institutional Investors (FIIs), and weak global cues have contributed to the volatility in the Indian stock market.
The Nifty 50 index has fallen from its record high of 26,277 to around 20,000, representing a 16% decline. Similarly, the BSE Sensex has dropped from its peak of 85,978 by 12,893 points, or approximately 16%. Considering this weak market environment, brokerage firms are advising investors to invest in fundamentally b and well-valued stocks.
ICICI Securities gives City Union Bank a ‘BUY’ Rating
ICICI Securities, a prominent brokerage firm in India, has upgraded its rating on City Union Bank's stock, recommending a ‘BUY’. The brokerage believes that the bank's Net Interest Margin (NIM) has improved, leading to better future performance.
Target Price: ₹200
Rating: BUY
Upside Potential: 35%
ICICI Securities has set a target price of ₹200 for City Union Bank's stock, implying a potential return of up to 35% for investors. On Monday, the stock closed at ₹149.35 on the BSE.
Past Performance of the Stock?
City Union Bank's stock is trading 20% below its high. It has declined by 16.62% in the last month and 20.18% in the last three months. However, on a year-to-date basis, the stock has delivered a 5.62% return.
52-Week High: ₹187
52-Week Low: ₹125.35
Market Cap: ₹10,929 Crore
Why does the brokerage recommend a ‘BUY’?
According to ICICI Securities, the bank's performance improved in the December 2024-25 quarter. However, the stock has seen a 17% decline in the last month, attributed to technical market factors and some option expiry.
Brokerage's perspective:
Impact of Repo Rate Cut: The RBI's repo rate cut had put pressure on the Net Interest Margin (NIM), but the bank managed this by reducing its savings rate.
Bad Loan Draft Circular: This will not have any significant impact on the bank's profile.
Gold Loan Policy: The RBI's new gold loan circular will not affect the bank's gold loan business.
New Appointments: There will be no impediment to the appointment of the bank's next MD and CEO, ensuring a smooth leadership transition.
Strong Growth Expectations: City Union Bank's current valuation is at its lowest in three years, but its future growth prospects remain relatively b.
