A banking stock trading below Rs.50 surged 8 percent after the company announced strong quarterly results, showcasing improved financial performance. The rally was further supported by a notable reduction in non-performing assets (NPAs), boosting investor confidence in the stock’s outlook.
Price Movement
During Tuesday’s trading session, shares of UCO Bank Ltd reached an intra-day high of Rs.33.14 apiece, rising 7.7 percent from its previous closing price of Rs.30.78 apiece. However, the stock retreated later and is trading at Rs.31.97 apiece. Over the past five years, the stock has delivered over 150 percent returns.
Financial Performance
UCO Bank Ltd experienced a significant rise, fueled by strong growth in both revenue and net profit, as reflected in its latest financial results.
In Q4 FY25, the company posted revenue of Rs.8,136 crore, up by nearly 16.5 percent compared to Rs.6,984 crore in Q4 FY24. However, on a quarter-on-quarter basis, revenue fell by about 1.5 percent from Rs.8,258 crore recorded in Q3 FY25, although overall business momentum remained healthy.
The net profit for the quarter stood at Rs.652 crore, marking a rise of approximately 24.2 percent year-on-year from Rs.525 crore in the same period last year. On a sequential basis, net profit declined by around -1.8 percent compared to Rs.664 crore reported in Q3 FY25, indicating slight pressure on earnings.
Currently, UCO Bank Ltd is trading at a Price-to-Earnings (P/E) ratio of 15.69, which is marginally higher than the industry average of 14.81. The bank has an Earnings Per Share (EPS) of Rs.1.97, a CASA ratio of 39.25, and an Enterprise Value to Sales (EV/Sales) ratio of 12.96.
NPA Performance
UCO Bank reported an improvement in asset quality during Q4 FY25, with its Gross Non-Performing Assets (GNPA) declining to 2.69 percent from 2.91 percent in the previous quarter. In absolute terms, Gross NPAs stood at Rs.5,918.54 crores.
The Net NPA ratio also improved, falling to 0.50 percent from 0.63 percent on a quarter-on-quarter basis, with Net NPAs amounting to Rs.1,068.31 crores. This reflects the bank’s strengthened loan recovery efforts and overall better asset quality.
Segmental Performance
The segment revenue for UCO Bank across various operations includes Treasury Operations at Rs.1,980.58 crores, Corporate Banking Operations at Rs.4,073.52 crores, and Retail Banking Operations at Rs.2,076.35 crores. Within Retail Banking, Digital Banking contributed Rs.2,076.27 crores, while Other Retail Banking operations generated Rs.6,358.13 crores. The total revenue for the bank was Rs.8,136.80 crores.
Written by – Siddesh S Raskar
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