CUB cmp 166.50, heading higher to target 200 in one month
Technically, CUB is heading higher with higher highs and higher lows, price above all short-term averages and averages heading higher forming a U-shaped pattern on a daily time so we strong expect a target of 200 in a month time frame. Aggressively bought for trading and investment purpose.
Note
City Union Bank Limited is a banking company. The Bank's segments include Treasury, Corporate and Wholesale Banking, Retail Banking and Other banking operations.
Revenue Breakup FY24
Retail Banking - 59%
Treasury - 20%
Corporate/Wholesale Banking - 20%
Other - 1%
Key Ratios
Yield - 7.87% in FY24 vs 7.28% in FY22
Cost of Fund - 4.7% in FY24 vs 3.88% in FY22
NIM - 3.6% in FY24 vs 3.98% in FY22
ROA- 1.52% in FY24 vs 1.35% in FY22
CASA - 31% in FY24 vs 33% in FY22
Capital Adequacy Ratio - 24% in FY24 vs 21% in FY22
Gross NPA - 3.99% in FY24 vs 5% in FY22
Net NPA - 1.97% in FY24 vs 3% in FY22
PCR - 72% in FY24 vs 64% in FY22
Note
CUB opened a digital banking unit in Q3 FY23 with the help of BCG to automate processes from KYC to credit analysis. 95% of it customer transactions take place online. It has introduced new digital products like BBPS, pay to contact, UPI, ATM-ICCW, Banking, etc. CUB incurs an investment of Rs.200cr every year on the technology initiatives, accounting to 20% of PAT.Note
They have piloted digital unsecured lending for existing customers, predominantly salaried, with a small portfolio of Rs 3 to 4 crores. Plans to expand digital lending to secure retail lending such as housing and micro-LAP in 1QFY25.The company is planning to open 50 to 75 branches during FY25. It is planning to expand the secured retail lending portfolio with home loans, affordable home loans, loan against property and micro-LAP. The management is optimistic about the benefits of digital lending and other initiatives translating into growth in the coming quarters.Note
CUB in pre-covid was above 240 and after covid, book value increased, EPS increased, ROA is also now back to pre-covid levels of 1.5 percentage and management expects it to grow even further due to increase in credit growth because of digitalisation and growth from the new products. Institutions who are tracking closely knows this and have started accumulating, anytime it can blast for 200 levels minimum. Get ready for sharp upside very soon. 
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