BANK STOCK TO BUY AFTER Q2 RESULTS: BROKERAGE HIKES TARGET PRICE

Bank stock to buy after Q2 results: Elara on City Union Bank: Brokerage firm Elara Capital has reiterated its Buy rating on City Union Bank (CUB), raising the target price to Rs 275 from Rs 255, citing the lender’s strong earnings performance, robust asset quality and healthy growth momentum across segments.

City Union Bank recently reported a 15 per cent rise in net profit to Rs 329 crore for the quarter ended September 30, 2025, compared to Rs 285 crore in the same period last year. The bank’s total income rose to Rs 1912 crore from Rs 1660 crore a year ago, according to its regulatory filing.

Elara noted that the bank’s quarterly performance exceeded estimates, with return on assets (RoA) of around 1.6 per cent and profit after tax (PAT) of Rs 328 crore. The brokerage highlighted that both loan and deposit growth remained healthy, with advances up 18 per cent year-on-year and deposits rising 21 per cent year-on-year, indicating steady business momentum.

Asset quality continues to be a key strength, with gross non-performing assets (GNPA) at 2.4 per cent and net NPA (NNPA) at 0.9 per cent, alongside negative net slippages, suggesting effective risk management and improved recovery trends.

Elara also observed that the bank’s retail portfolio is scaling well, driving predictable growth, while net interest margins (NIMs) have likely bottomed out. Although operating expenses remain elevated, they are considered constructive for scaling operations and sustaining long-term growth.

Reflecting its optimism, Elara has raised its earnings per share (EPS) estimate by 7 per cent, citing a strengthening turnaround and expecting a gradual re-rating of the stock as performance stabilizes further.

Overall, Elara expects City Union Bank’s improving fundamentals, expanding retail base and solid asset quality to support consistent profitability and shareholder value growth in the coming quarters.

(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions)

Stay informed with ET Now’s in-depth coverage of Business News, Stock Market updates, IPO announcements, Company News, and Personal Finance Updates. Track live Share Market data, Mutual Funds, and the latest news events in real time.

2025-11-04T05:24:06Z