City Union Bank zooms 101% from April low; hits new high; upside left?

In the past three months, City Union Bank shares have rallied 40 per cent, as compared to a 4.7-per cent rise in the BSE Sensex

City Union Bank share price today

 

Share price of City Union Bank (CUB) hit a new high of ₹295, gaining 2 per cent on the BSE in Wednesday's intraday deal, on likely expectation of healthy earnings growth ahead.

 

The stock of the private sector bank has outperformed the market in recent past. In the last three months, CUB shre price has rallied 40 per cent as compared to a 4.7-per cent rise in the BSE Sensex index. Further, in the past six months, it has surged 52 per cent as against a 4-per cent gain in the benchmark index. 

 

The market price of City Union Bank more-than-doubled, zooming 101 per cent, from its April 2025 low of ₹147, touched on the BSE.

 

Is more upside left in City Union Bank stock price?

 

City Union Bank is an old, private sector bank with 889 branches across 18 states and four Union territories. The bank has positioned itself as a banker to SMEs, Agri, and Traders apart from all other banking activities.

 

According to rating agency ICRA, City Union Bank has steadily improved its profitability and asset quality, along with its strong capitalisation profile (core equity tier I (CET I) ratio of 20.71 per cent (as on September 30, 2025). The bank, also, continues to expand its scale of operations, it said. 

 

"The bank was able to maintain its net interest margin (NIMs) as a percentage of average total assets (ATA) in H1FY26 at 3.2 per cent (3.1 per cent in FY25; 3.2 per cent in H1FY25) on account of faster repricing of its deposit base and advances. This was despite the current declining interest rate scenario and the compression in NIMs witnessed across the sector," ICRA noted.

 

Going forward, with the expected uptick in the slippage rate and the slowdown in recoveries/upgrades, credit costs are likely to normalise. However, despite this, profitability is expected to remain healthy, the rating agency said.  CATCH STOCK MARKET LIVE UPDATES TODAY

Brokerages bullish on City Union Bank

 

Analysts at Nirmal Bang Institutional Equities have a 'Buy' rating on CUB with a target price of ₹330 per share. The brokerage firm estimates the lender to post loan/earnings CAGR of 15.6 per cent /17.3 per cent over FY25-FY28, which will lead to RoA/RoE of 1.6 per cent/14.3 per cent in FY28.  

 

Analysts at the brokerage valued City Union Bank stock at 2x its Sep-27E ABV (as against 1.75x Sep-27E earlier), thus raising the target price from ₹285. 

 

The brokerage firm said that though the target multiple is at a 25 per cent premium to the past 5-year average multiple of 1.6x, they are positive on CUB due to its improved growth prospects from the turnaround in the core micro, small and medium enterprises (MSME) loan business and incremental contribution that is coming from the recent launch of the retail business. The asset quality and PCR have also improved, it said.

 

Meanwhile, CUB management expects margins to remain stable with a slight positive bias, supported by lower funding costs. Operating expenses rose 20 per cent Y-o-Yin Q2FY26, led by employee costs, but the bank expects this to moderate to 15 per cent Y-o-Y in the coming quarters.

 

"Regaining consistency in terms of resilient growth, margin trajectory, along with prudent risk management, is seen aiding valuations. We assign a multiple of ~1.8x FY27E BV to CUB," said those at ICICI Securities. The stock, however, achieved the brokerage firm's target price of ₹290 today.

 

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