Brokerage house Firstcall Research is bullish on City Union Bank and has recommended buy rating on the stock with a target price of Rs 110 in its research report dated April 04, 2015.
Firstcall Research's report on City Union Bank
"City Union Bank was incorporated on 31st October, 1904 as 'The Kumbakonam Bank', head quartered in Chennai. The bank in the beginning preferred the role of a regional bank and slowly but steadily built for itself a place in the Delta District Thanjavur. The company set up its first branch at Mannargud on 24th January 1930. After this the company started set up a series of branches at Nagapattinam, Sannanallur, Ayyampet, Tirukattupalli, Tiruvarur, Manapparai, Mayuram and Porayar within a period of 25 years."
"City Union Bank Ltd has achieved Total Interest Earned of Rs. 6845.02 million for the 3rd quarter of the financial year 2014-15 as against Rs. 6461.32 million in the corresponding quarter of the previous year. The bank has reported a net profit of Rs. 1027.00 million against Rs. 890.83 million in the corresponding quarter of the previous year. The bank has reported an EPS of Rs. 1.72 for the 3rd quarter as against an EPS of Rs. 1.65 in the corresponding quarter of the previous year. The Bank has inaugurated its 475th branch on 30th March, 2015 at Anna Salai located at Ponnamaravathy, Pudukkottai – Dist, Tamil Nadu. The Savings bank deposits recorded a growth of 16% as on 31st December, 2014. The Bank's Balance Sheet size increased by 10% to RS. 269020.00 mn as on December 31, 2014 from Rs. 244690.00 mn as on December 31, 2013. The total Deposits as on 31st Dec 2014, increased from Rs. 211160.00 mn to Rs. 232030.00 mn thereby registering a growth of 10% y-o-y basis. As on Dec 31, 2014 Advances portfolio registered a growth of 7% yoy basis to Rs. 169680.00 mn, from Rs. 158250.00 mn as on Dec 31, 2013. Gross & Net NPA level stood at 2.12% & 1.31% respectively as on December 31, 2014. The Provision Coverage Ratio as at December 31, 2014 stood at 62%. As on 31st Dec 2014, Capital Adequacy Ratio under Basel III increased to 15.73%."
"At the current market price of Rs.98.25, the stock P/E ratio is at 14.80 x FY15E and 13.16 x FY16E respectively. Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs. 6.64 and Rs. 7.46 respectively. Total Interest Earned and PAT of the company are expected to grow at a CAGR of 10% and 11% over 2013 to 2016E respectively. Debt-Equity ratio is expected at 10.03 x for FY15E and 9.07 x for FY16E. Price to Book Value of the stock is expected to be at 2.42 x and 2.04 x for FY15E and FY16E respectively. We recommend 'BUY' in this particular scrip with a target price of Rs. 110.00 for Medium to Long term investment", says Firstcall Research report.
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