The management has been very conservative in disbursing loans(which should actually be a good sign but that has led to slow growth) but now they want to go a bit aggressive. Plus the revenues, financing profits, and net profits have risen consistently but the share price has not inculcated the growth in last 5 years. NPAs are controlled and declining on both QoQ and YoY basis. I tried but couldn’t find any major red flags in the company.
So, the main reason is the valuations (one of the lowest price-to-book multiples in the industry currently). I really think that when banks and financials start to give a run-up, city union bank will benefit from 2 way- reversion to the mean industry valuations, and sector bullishness.
Subscribe To Our Free Newsletter |