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Indiabulls Venture
CUB (Buy)
CMP: 200.8
Target: ₹255
The City Union Bank is a banking company. The bank’s segments include treasury, corporate and wholesale banking, retail banking and other banking operations. It offers personal banking, corporate banking and non-resident Indian banking services.
The City Unio Bank has reported an improvement in its performance on every count both on a quarterly as well as on a yearly basis. The management is known for walking the talk and has always achieved its guidance. For the year FY19, the management has guided for 18-20 per cent growth rate on its loan book and 16 per cent ROE (return on equity).
We believe the management will continue to achieve its guidance as a result we would like to allot a premium valuation. CUB is currently trading at about 2.3x FY20 P/BV and looking at its historical trend; we would like to allot a P/BV (price-to-book-value) of 3x on FY20 basis on an FY20 BV of ₹85 to arrive at a target price of ₹255.
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