Union Bank of India (UNBK IN) – Q1FY27 Result Update – Deposit growth a key monitorable – ACCUMULATE
Published on 16 Jul 2026
UNBK saw a decent quarter as core PPoP was a 4.6% beat driven by higher NII due to better reported NIM that increased by 16bps QoQ to 2.8%. Utilization of surplus cash and increase in LDR by 300bps QoQ led to better NIM. As deposit growth resumes and liquidity normalizes, NIM may moderate which we have factored. While loan growth for FY27 was guided at 1% above industry, we estimate loan CAGR of 10.5% over FY26-28E as we are watchful of deposit growth that has been muted (3.5% YoY in Q1’27). One-time ECL hit would be INR 60bn; sustainable impact is being evaluated. We keep multiple at 1.0x on Mar’28 ABV; cut TP to INR 190 from INR 200. Retain ‘ACCUMULATE’.
