Buy City Union Bank; target of Rs 192: HDFC Securities

HDFC Securities is bullish on City Union Bank has recommended buy rating on the stock with a target price of Rs 192 in its research report dated February 04, 2021.

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HDFC Securities’ research report on City Union Bank

Despite higher-than-expected LLPs, CUBK’s 3Q earnings were ~22% ahead of estimates on the back of a strong operating performance, driven by (1) an uptick in NIMs, (2) elevated treasury gains, and (3) better operating leverage. However, the pace and quantum of potential stress evolving at the bank, disappointed, especially when set against the backdrop of improving macros and consequently, peers’ performance.

Outlook

We reduce our earnings estimates by ~7% over FY22-23E; we maintain BUY with a target price of INR 192.

For all recommendations report, click here

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