Union Bank Shares Crash 6%: 7 Shocking Q4 Figures Every Investor Must Know!
Union Bank of India shares fell sharply by 5.79% on Friday, hitting a low of ₹123.75 after the bank released its Q4 FY25 business update. Despite the market reaction, the bank showed healthy growth across key metrics. Total advances rose 8.62% year-on-year to ₹9.82 lakh crore, while domestic RAM advances stood at ₹5.34 lakh crore, marking a 10.63% increase. Retail loans surged by 22.14% YoY, reaching ₹2.17 lakh crore, and CASA deposits grew 3.94% to ₹4.26 lakh crore.
The stock saw high trading volumes on the BSE, with over 8 lakh shares traded, significantly above the two-week average. Technically, the stock remains strong above its 20- to 200-day moving averages, though it trades below its shorter-term averages. Axis Securities suggested a buying range of ₹124–₹120 with a target of ₹140–₹146 in 3–4 weeks. With a low P/E ratio of 5.81, solid RoE of 15.24%, and high volatility (beta 1.7), the stock remains attractive for medium-term investors.
Union Bank Shares Crash 6%: 7 Shocking Q4 Figures Every Investor Must Know!
Shares of Union Bank of India plummeted 5.79% on Friday, hitting an intraday low of ₹123.75, following the release of its business update for the fourth quarter of FY25 (March 2025). Despite the sharp decline in stock price, the bank reported robust growth across critical metrics, sparking mixed reactions from investors.
What Triggered the Sell-Off?
The stock’s drop appears linked to profit booking or cautious investor sentiment after the Q4 update, even as the bank showcased healthy operational performance. Heavy trading activity was observed, with over 8 lakh shares traded on the BSE—more than double the two-week average of 3.3 lakh shares. The day’s turnover reached ₹10.34 crore, reflecting heightened market interest.
Q4 Business Highlights: Strong Growth Amid Challenges
The bank’s quarterly update highlighted significant progress in key areas:
- Loan Growth: Total advances surged 8.62% year-on-year (YoY) to cross ₹9.82 lakh crore. This includes a 10.63% rise in domestic RAM advances (Retail, Agriculture, and MSME loans) to ₹5.34 lakh crore. Retail loans alone jumped 22.14% YoY to ₹2.17 lakh crore, signaling strong demand in consumer lending.
- Deposit Growth: Current and Savings Account (CASA) deposits, a low-cost funding source, grew 3.94% YoY to ₹4.26 lakh crore. While CASA growth was modest, it underscores the bank’s ability to attract stable deposits.
Market Sentiment and Technical Analysis
Despite the day’s slump, Union Bank’s stock remains resilient in the medium to long term. Technically, the shares are trading below their 5-day and 10-day Simple Moving Averages (SMAs) but stay above key SMAs ranging from the 20-day to the 200-day levels. The 14-day Relative Strength Index (RSI) at 55.2 suggests the stock is neither overbought nor oversold, indicating room for movement in either direction.
Brokerage Perspective: A Buying Opportunity?
Axis Securities views the dip as a potential entry point for investors. The brokerage recommends accumulating shares in the ₹120–₹124 range, with a stop loss at ₹113. It projects a short-term target of ₹140–₹146 over 3–4 weeks, implying a potential upside of 13–18% from current levels.
Valuation and Financial Health
Union Bank’s stock remains attractively valued compared to industry peers:
- P/E Ratio: 5.81 (low, suggesting undervaluation relative to earnings)
- P/B Ratio: 0.89 (trading below book value, often seen as a value indicator)
- Return on Equity (RoE): 15.24%, reflecting efficient use of shareholder funds
- EPS: ₹21.37, indicating steady profitability
However, the stock’s high beta of 1.7 signals volatility, meaning it may swing more sharply than the broader market.
Government Stake and Long-Term Outlook
The Indian government retains a 74.76% stake in the bank as of December 2024, highlighting its status as a majority state-owned entity. This backing could provide stability during market turbulence. Analysts remain optimistic about the bank’s focus on retail lending and RAM segments, which are likely to drive future growth.
Final Takeaway
While Union Bank’s stock faced immediate pressure post-update, its strong fundamentals and growth trajectory present a compelling case for investors with a higher risk appetite. The current valuation, combined with bullish brokerage targets, suggests the dip could be a strategic buying opportunity. However, the high beta warrants caution, as market volatility may lead to abrupt price swings.
Investors should monitor broader economic trends, interest rate movements, and the bank’s asset quality in upcoming quarters to gauge its resilience in a dynamic banking landscape.
This article does not provide investment advice. Consult a certified financial advisor before making any decisions.