Union Bank of India downgraded to 'Sell' by MarketsMOJO due to flat results and bearish trend

Union Bank of India, one of the largest public sector banks in India, has recently been downgraded to a 'Sell' by MarketsMOJO on September 30, 2024. This decision was based on several factors, including the company's flat results in the June 2024 quarter, with a PBT of only Rs 520.27 crore and non-operating income accounting for 89.66% of the profit before tax.
The stock is currently in a bearish range, with technical indicators such as MACD, Bollinger Band, and KST all pointing towards a downward trend. Additionally, institutional investors have decreased their stake in the company by -0.62% in the previous quarter, indicating a lack of confidence in its performance.

In the last year, Union Bank of India has underperformed the market, generating a return of only 15.51% compared to the BSE 500 index's 39.48% return. However, the company does have strong provisioning practices, with a provision coverage ratio of 73.93%. It also has a healthy long-term growth rate, with a 47.32% CAGR growth in net profits and a 30.24% annual growth in net interest income.

Despite these positive factors, the stock is currently trading at a discount compared to its historical valuations, with a price to book value of 0.9. Its profits have also risen by 39.4% in the past year, resulting in a low PEG ratio of 0.3. Overall, while Union Bank of India may have some strengths, the current market conditions and performance indicators suggest that it may not be a wise investment choice at this time.