Union Bank of India is Rated Strong Buy by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s Strong Buy rating for Union Bank of India indicates a high conviction in the stock’s potential for superior returns relative to its peers and the broader market. This rating is supported by a comprehensive assessment across four key parameters: quality, valuation, financial trend, and technicals. Investors should understand that a Strong Buy rating suggests the stock is expected to outperform, backed by robust fundamentals and favourable market conditions.

Quality Assessment: Solid Fundamentals and Risk Management

As of 14 February 2026, Union Bank of India demonstrates strong quality metrics. The bank’s provisioning practices are notably prudent, with a provision coverage ratio of 76.68%, reflecting a cautious approach to managing potential credit losses. This is complemented by a low Gross Non-Performing Assets (NPA) ratio of 3.06% and an impressively low Net NPA of 0.51%, underscoring effective asset quality management.

Moreover, the bank’s long-term fundamental strength is evident in its net profit growth, which has compounded at an annual rate of 63.27%. This sustained profitability growth highlights the bank’s ability to generate shareholder value consistently over time, a critical factor in the quality grading that supports the Strong Buy rating.

Valuation: Attractive Entry Point for Investors

Union Bank of India’s valuation remains very attractive as of today. The stock trades at a Price to Book (P/B) ratio of 1.1, which is reasonable when compared to its historical averages and peer group valuations. This suggests that the stock is fairly priced, offering value without excessive premium.

The Return on Assets (ROA) stands at 1.2%, indicating efficient utilisation of the bank’s asset base to generate profits. Additionally, the Price/Earnings to Growth (PEG) ratio is 0.6, signalling that the stock’s price growth is undervalued relative to its earnings growth potential. This combination of metrics makes the stock an appealing proposition for value-conscious investors seeking growth.

Financial Trend: Positive Momentum and Growth Trajectory

The latest data shows that Union Bank of India is on a strong financial trajectory. Over the past year, the stock has delivered a remarkable return of 58.07%, reflecting both market confidence and operational success. The company’s profits have increased by 12.6% during the same period, reinforcing the sustainability of its growth.

The bank’s credit deposit ratio, currently at 81.03%, is among the highest in its peer group, indicating effective mobilisation and deployment of funds. This healthy ratio supports the bank’s lending capacity and revenue generation potential, further underpinning the positive financial trend that contributes to the Strong Buy rating.

Technical Outlook: Bullish Signals Support Upward Momentum

From a technical perspective, Union Bank of India exhibits a bullish trend. The stock’s price movement over recent months has shown consistent strength, with a 6-month gain of 31.69% and a 3-month gain of 17.68%. Even the one-month return of 7.55% reflects sustained buying interest.

Despite a minor 1-day decline of 1.24% as of 14 February 2026, the overall technical indicators remain positive, signalling continued investor confidence and potential for further upside. This technical strength complements the fundamental and valuation factors, reinforcing the Strong Buy recommendation.

Investment Implications for Market Participants

For investors, the Strong Buy rating on Union Bank of India suggests a compelling opportunity to participate in a stock with solid fundamentals, attractive valuation, positive financial momentum, and favourable technical signals. The bank’s prudent risk management and consistent profit growth provide a cushion against market volatility, while its valuation metrics indicate that the stock is not overextended.

Investors should consider this rating as a signal to evaluate Union Bank of India as a core holding within the public sector banking space, particularly for those seeking a blend of growth and value. The current market environment, combined with the bank’s operational strengths, supports a positive outlook for the stock’s medium to long-term performance.

Summary of Key Metrics as of 14 February 2026

Union Bank of India’s Mojo Score stands at 81.0, reflecting a Strong Buy grade, up from a previous Buy rating of 78. The stock’s market capitalisation places it firmly in the largecap category within the public sector banking sector.

Performance returns are robust, with a year-to-date gain of 16.19% and a one-year return of 58.07%. The bank’s credit deposit ratio of 81.03% and low NPA ratios highlight operational efficiency and asset quality. The provision coverage ratio of 76.68% further demonstrates conservative risk management.

Valuation metrics such as a P/B ratio of 1.1 and a PEG ratio of 0.6 indicate the stock is attractively priced relative to its growth prospects. The ROA of 1.2% confirms effective asset utilisation, while the technical outlook remains bullish despite short-term fluctuations.

Conclusion: A Strong Buy with Balanced Strengths

Union Bank of India’s current Strong Buy rating by MarketsMOJO is well justified by its strong quality fundamentals, attractive valuation, positive financial trends, and bullish technical indicators. Investors looking for exposure to a public sector bank with a proven track record of growth and prudent risk management will find this stock compelling.

While market conditions can change, the bank’s current profile suggests it is well positioned to deliver value in the coming months. The rating reflects a comprehensive analysis that balances growth potential with risk considerations, making it a noteworthy candidate for inclusion in diversified portfolios.

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