UNIONBANK

UNIONBANK – Union Bank of India currently remains one of the stronger PSU banking plays from a valuation perspective, but recent Q4 FY26 results created short term pressure on the stock. Fundamental Analysis Union Bank reported FY26 net profit of ₹18,697 crore with improving asset quality. Gross NPA reduced to 2.82% while Net NPA improved to 0.48%, which is a positive sign for long term banking strength. Capital adequacy also remained strong at 18.10%. However, market reacted negatively because: Net Interest Income (NII) declined slightly NIMs came under pressure Slippages and provisions increased sequentially Deposit growth remained comparatively weaker Q4 FY26 net profit increased around 6.6% YoY to ₹5,316 crore, but investors expected stronger numbers. Positives Attractive valuation compared to private banks Strong government backing Improving NPAs Good ROA and ROE for PSU banking space Retail, MSME and RAM book growing steadily Dividend recommendation of ₹5/share Risks Margin pressure in coming quarters PSU banks generally remain volatile after results Slower deposit growth can impact future lending Stock sentiment weak after recent correction Technical Analysis Technically, the stock corrected sharply after Q4 results and profit booking was visible near higher levels. Short term trend currently looks sideways to slightly weak. Important Levels Strong Support Zone: ₹165 – ₹172 Immediate Resistance: ₹185 – ₹192 Major Breakout Zone: Above ₹200 Positional bullish momentum may return only after sustaining above ₹200. If stock holds above support zone, rebound possibility remains strong because PSU banking space is still structurally positive.