Buy stocks of Union Bank of India for mid term

Stock market investment research team of one of the stock trading broker is bullish on Union Bank of India. This is a stock tip based on their equity research report.

They have published a stock research note with "buy stocks" recommendation on Union Bank Of India with Target Price of Rs.350

The reasons behind this stock tip are:

=> 4QFY10 earnings are better than street expectation.
=> Higher than expected non – interest income helped the bank to beat expectations.
=> Sequentially, net interest income grew by a healthy 31% and non interest income increased by 6%.
=> Net interest margin expended by 68bps and loan book grew at 14% quarter on quarter.
=> Gross non performing loans (GNPL) increased by 28% and NNPL (net non performing loans) grew 57% quarter on quarter.
=> Asset quality pressure may persist some more time.
=> For FY11, loan growth is expected at 20% and net interest income may grow at 22% with 2.6% NIM

At the target price, Union Bank stock value stands at 1.8 multiple of FY11 expected adjusted book value and adjusted ROE of 19.6%.