Understanding the Current Rating
The 'Buy' rating assigned to Union Bank of India by MarketsMOJO indicates a positive outlook on the stock’s potential for returns relative to its risk profile. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s investment merit in the current market environment.
Quality Assessment
As of 20 January 2026, Union Bank of India demonstrates strong quality fundamentals. The bank maintains robust provisioning practices, with a provision coverage ratio of 76.68%, which reflects prudent risk management and a buffer against potential loan losses. Additionally, the gross non-performing assets (NPA) ratio stands at a low 3.06%, while net NPA is even lower at 0.51%, underscoring the bank’s effective asset quality control.
Long-term fundamental strength is evident in the company’s net profit growth, which has achieved a compound annual growth rate (CAGR) of 63.27%. This impressive growth trajectory highlights the bank’s ability to expand its profitability sustainably over time, a critical factor in the quality grading that supports the current 'Buy' rating.
Valuation Perspective
Union Bank of India’s valuation remains attractive as of the latest data. The stock trades at a price-to-book (P/B) ratio of approximately 1.1, which is considered fair relative to its historical averages and peer group valuations. This valuation level suggests that the stock is reasonably priced, offering investors an opportunity to buy into a fundamentally strong bank without paying a premium.
The return on assets (ROA) of 1.2% further supports the valuation appeal, indicating efficient utilisation of the bank’s assets to generate profits. Moreover, the price/earnings to growth (PEG) ratio stands at 0.6, signalling that the stock’s price growth is favourable compared to its earnings growth, a positive sign for value-conscious investors.
Financial Trend Analysis
The financial trend for Union Bank of India remains positive, with the latest figures showing sustained growth and improving profitability. Over the past year, the stock has delivered a remarkable return of 59.20%, reflecting strong market confidence and robust operational performance. Year-to-date returns are also encouraging at 15.57%, with a one-month gain of 15.38% and a three-month increase of 25.71%.
Credit deposit ratio, a key indicator of lending activity, is at a healthy 81.03%, the highest in recent periods, signalling strong credit growth and effective mobilisation of deposits. This trend supports the bank’s revenue generation capabilities and underpins the positive financial grade assigned.
Technical Outlook
From a technical standpoint, Union Bank of India exhibits bullish momentum. The stock’s price movements over various time frames show consistent upward trends, with a one-week gain of 6.98% and a six-month increase of 21.41%. The day change on 20 January 2026 was a modest +0.14%, indicating steady investor interest without excessive volatility.
This bullish technical grade complements the fundamental strengths, suggesting that the stock is well-positioned for further appreciation in the near term. Investors often consider such technical signals alongside fundamental analysis to time their entries and exits more effectively.
Summary of Key Metrics as of 20 January 2026
- Provision Coverage Ratio: 76.68%
- Gross NPA: 3.06%
- Net NPA: 0.51%
- Net Profit CAGR: 63.27%
- Credit Deposit Ratio: 81.03%
- ROA: 1.2%
- Price to Book Value: 1.1
- PEG Ratio: 0.6
- 1-Year Stock Return: 59.20%
Built for the long haul! Consecutive quarters of strong growth landed this Small Cap from Chemicals on our Reliable Performers list. Sustainable gains are clearly ahead!
- - Long-term growth stock
- - Multi-quarter performance
- - Sustainable gains ahead
What This Rating Means for Investors
For investors, the 'Buy' rating on Union Bank of India signals a favourable risk-reward profile based on current market and company fundamentals. The strong quality metrics indicate that the bank is managing credit risks effectively, while the attractive valuation suggests the stock is reasonably priced relative to its earnings potential.
The positive financial trend and bullish technical outlook further reinforce the stock’s potential for capital appreciation. Investors looking for exposure to the public sector banking space may find Union Bank of India a compelling option, given its demonstrated growth and solid balance sheet.
However, as with all investments, it is prudent to consider broader market conditions and sector-specific risks. The banking sector can be sensitive to economic cycles, regulatory changes, and interest rate movements, which may impact future performance.
Conclusion
In summary, Union Bank of India’s current 'Buy' rating by MarketsMOJO, updated on 14 January 2026, reflects a comprehensive assessment of its quality, valuation, financial trend, and technical strength as of 20 January 2026. The bank’s strong provisioning, impressive profit growth, attractive valuation, and positive price momentum combine to present a compelling investment case for those seeking growth within the public sector banking segment.
Investors should continue to monitor the company’s quarterly results and sector developments to ensure alignment with their investment objectives and risk tolerance.
Unlock special upgrade rates for a limited period. Start Saving Now →
