Strong Price Performance and Market Positioning
The stock touched an intraday high of Rs.304.45, marking a 4.57% increase from its previous close. This performance outpaced the private sector banking sector by 4.53%, underscoring the bank’s growing appeal among market participants. City Union Bank is currently trading above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained upward momentum and technical strength.
Over the past year, City Union Bank has delivered an impressive return of 74.75%, significantly outperforming the Sensex’s 7.18% gain during the same period. The stock’s 52-week low was Rs.144, highlighting the substantial appreciation in value over the last twelve months.
Financial Metrics Underpinning the Rally
City Union Bank’s rally is supported by solid fundamentals. The bank maintains a low Gross Non-Performing Asset (NPA) ratio of 2.42%, which is among the lowest in its peer group, reflecting prudent lending practices. Additionally, the bank boasts a high Capital Adequacy Ratio of 20.09%, indicating strong buffers against risk-weighted assets and a healthy capital position.
Net interest income (NII) reached a quarterly high of Rs.666.54 crore, while operating cash flow for the year peaked at Rs.1,128.30 crore, both signalling robust operational cash generation and profitability. The bank has also reported positive results for five consecutive quarters, reinforcing its consistent growth trajectory.
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Institutional Confidence and Market Standing
Institutional investors hold a significant 63.73% stake in City Union Bank, reflecting confidence from well-resourced market participants who typically conduct thorough fundamental analysis. Notably, institutional holdings have increased by 1.02% over the previous quarter, signalling growing endorsement of the bank’s prospects.
The bank’s Mojo Score stands at 72.0 with a Mojo Grade of Buy, upgraded from Hold on 21 January 2026. This upgrade reflects improved financial health and market positioning. The Market Cap Grade is 3, indicating a mid-tier market capitalisation within its sector.
Comparative Market Context
While City Union Bank has surged, the broader market has shown mixed signals. The Sensex opened at 81,947.31, down 619.06 points (-0.75%), and was trading at 82,269.78 (-0.36%) at the time of reporting. The index remains 4.73% below its own 52-week high of 86,159.02. Moreover, the Sensex is trading below its 50-day moving average, although the 50-day average remains above the 200-day average, indicating some underlying market resilience.
Valuation and Profitability Considerations
City Union Bank’s return on assets (ROA) stands at 1.4%, a respectable figure in the banking sector. However, the stock trades at a premium valuation with a price-to-book value of 2.2, higher than the average historical valuations of its peers. The price-to-earnings-to-growth (PEG) ratio is 1.3, reflecting a valuation that factors in the bank’s earnings growth of 14.3% over the past year.
Despite the premium, the bank’s consistent profit growth and strong capital metrics provide a solid foundation for its current market valuation.
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Long-Term Growth and Consistency
City Union Bank has demonstrated healthy long-term growth, with net profit increasing at an annual rate of 24.20%. The bank’s ability to sustain positive quarterly results over the last five quarters highlights operational consistency and effective management strategies. This steady growth has contributed to the stock’s market-beating performance over multiple time frames, including one year, three months, and three years relative to the BSE500 index.
The bank’s strong lending practices, combined with a high capital adequacy ratio, provide a robust framework for continued financial stability and growth.
Summary of Key Metrics
To summarise, City Union Bank Ltd. has achieved a new 52-week high of Rs.304.45, supported by:
- 74.75% return over the past year versus Sensex’s 7.18%
- Gross NPA ratio at a low 2.42%
- Capital Adequacy Ratio of 20.09%
- Net interest income quarterly high of Rs.666.54 crore
- Operating cash flow for the year at Rs.1,128.30 crore
- Institutional holdings at 63.73%, increased by 1.02% quarter-on-quarter
- Mojo Score of 72.0 and upgraded Mojo Grade to Buy
These factors collectively underpin the stock’s strong performance and its recent milestone in the market.
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