Check Before You Invest : UCO Bank

BSE: 532505 NSE: UCOBANK ISIN: INE691A01018

| Sector: BFSI | Industry: Bank - Public

Snapshot

Q.1 Which industry/sub-sector does UCO Bank belong to?

UCO Bank belongs to the BFSI sector, operating specifically within the Bank - Public segment.

Q.2 Is UCO Bank a good quality company?

UCO Bank is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is UCO Bank undervalued or overvalued?

UCO Bank appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is UCO Bank a good buy now?

UCO Bank is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of UCO Bank?

UCO Bank Total Income growth is 17.33% for FY-2025, which is above its 5-year CAGR of 10.36%, indicating faster growth.

Q.2 Return on Assets of UCO Bank?

UCO Bank Return on Asset is 0.7%, which is above its 5-year historical median of 0.5%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NIM%	2.79	2.63
PPOP%	50.48	-0.7
RoA%	0.7	0.5

Q.3 Return on Equity (ROE) of UCO Bank?

UCO Bank Return on Equity is 9.4% for FY-2025, which is above its 5-year historical median of 7%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of UCO Bank?

UCO Bank Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 50.48% for FY-2025, which is above its 5-year median(-0.7%), indicating increasing margins.

Q.5 Net Interest Margin of UCO Bank?

UCO Bank Net Interest Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 2.79% for FY-2025, which is above its 5-year median( 2.63%), indicating increasing margins.

Q.6 Total Asset growth of UCO Bank?

UCO Bank Total Asset growth is 11.98% for FY-2025, which is above its 5-year CAGR of 8.97%, indicating faster growth.

Q.7 Cost to Income ratio of UCO Bank?

UCO Bank Cost to Income ratio which represents the cost incurred for every Rs.100 earned is 57% for FY-2025, is higher its historical 5-year median of 55.9%, indicating improved cost management.

Q.8 Capital Adequacy ratio of UCO Bank?

UCO Bank Capital Adequacy ratio (CAR) is 18.5% for FY-2025, which is above the regulatory requirement of 12%, indicating strong capital position.

Q.9 Asset Quality of UCO Bank?

UCO Bank Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 2.69% for FY-2025, which is below its 5-year median 4.78%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.5% which is below its 5-year median( 1.29%), indicating improving asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of UCO Bank?

Promoters hold 90.95% of the UCO Bank, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of UCO Bank vs Industry Peers?

UCO Bank AUM CAGR is 8.97%, compared to the 5-year industry median CAGR of 9.37%, indicating slower growth and losing its market share.

Q.2 Profit metrics (NIM, PPOP, RoA) of UCO Bank vs industry peers

UCO Bank profit metrics are in line with the industry median level of 6.24%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NIM%	2.79	2.73
PPOP%	50.48	15.38
RoA%	0.7	0.6

Q.3 Operating efficiency of UCO Bank vs industry peers?

UCO Bank Cost to Income (53) is above the industry median of (50.2); while the current ROE (7) are below than the 5-year average Industry ROE (8.7). This shows that the business is positioned in the middle quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NIM%	2.79	2.73
PPOP%	50.48	15.38
RoA%	0.7	0.6
Cost to Income%	57	50.2
ROE%	9.4	8.7

Valuation & price assessment

Q.1 Stock return of UCO Bank over the last decade?

Over the last 9 years, the stock has delivered a CAGR of -3.8% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-3.8%	19.5%	-4.4%	-14.9%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	12.16	21.15	10.62
Price to Book	1.12	1.38	1.12
Price to Sales	1.28	1.60	1.15
EV to EBITDA	8.08	8.96	5.03

Q.4 Valuation ratios of UCO Bankvs historical and industry averages?

The current Price to book ratio (P/B) 1.12% is lower than its historical median of 1.38%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

UCO Bank return on invested capital (ROIC) is 23.58% for FY-2025, is higher than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

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