Union Bank of India had a bad Q1FY18 – profitability has dropped and so has the asset quality; following this, brokerage houses have cut the price targets. And thanks to this, the stock is currently amongst the top five losers on the BSE, down some 7% at Rs.125 levels. Its 52-week low is not too far away at Rs.116.25.
The Bank posted a 30% (YoY) drop in net profit at Rs.117 crore on a 7% rise in NII at Rs.2248 crore. That apart, its asset quality has deteriorated. Gross NPA has risen from 11.17% to 12.63% and Net NPA rose from 6.57% to 7.47%/
Provisioning rose from Rs.1505 crore to Rs.1876 crore – it stated that it has made an additional provision of Rs.29 crore towards telecom sector.
Following this poor show, Credit Suisse has cut the price target from Rs.130 to Rs.116 and Motilal Oswal also cut it from Rs.174 to Rs.139.