Emkay Global Recommends 'REDUCE' on Union Bank, Sets Rs 160 Target

• Union Bank of India (UNBK) reported an 11% PAT beat at Rs 50bn in Q3, driven by lower provisions.
• Credit growth for UNBK remains sub-par at 8% YoY, with management aiming to accelerate growth via the RAM segment.
• The bank strategically shed bulk deposits, improving margins by 9bps QoQ, but core deposit growth is a challenge (up ~0.5% YoY).
• NPA ratios are declining due to contained fresh slippages and corporate recovery, though Emkay suggests accelerating ECL provisions.
• Emkay Global raised FY26-28E earnings by 1-8% and increased the target price to Rs 160 (from Rs 140) based on earnings upgrade and rolling forward to 0.9x Dec-27E ABV.

Why It Matters: Emkay Global maintains a 'REDUCE' rating on Union Bank despite an earnings beat, citing sub-par growth and valuation.