Union Bank of India is a leading public sector bank in India, formed through the merger of the erstwhile Union Bank and Andhra Bank in 2020. Headquartered in Mumbai, it operates over 8,700 branches nationwide and plays a vital role in India’s financial inclusion and economic development. The bank has demonstrated strong financial recovery in recent years, with robust asset quality, consistent profitability, and a healthy capital adequacy ratio (CAR) of 18.02%. This article offers a clear, fact-based analysis of its business model, financial health, and future outlook, enabling the establishment of realistic share price targets from 2026 through 2030.
Union Bank of India: Company Overview
- Business Model: Offers a full suite of banking services, including retail, corporate, agricultural, MSME, NRI, and treasury operations.
- Geography: Operates pan-India with a strong presence in South and West India, inherited from its legacy banks.
- Key Developments: The bank reported a stellar 31.79% YoY profit growth in FY2025, driven by strong net interest income and improved asset quality. Its Gross NPA stands at 4.23% and Net NPA at just 1.27%, among the best in the PSU banking space.
Union Bank of India: Key Financial Snapshot
| Metric | Value |
|---|---|
| Current Share Price | ₹167 |
| Market Capitalization | ₹1,26,832 Crore |
| 52-Week High/Low | ₹170 / ₹101 |
| P/E (TTM) | 7.06 |
| P/B (TTM) | 1.11 |
| ROE (FY2025) | 18.24% |
| ROCE (FY2025) | 21.02% |
| CASA Ratio | 32.55% |
| Capital Adequacy Ratio (CAR) | 18.02% |
| Net Interest Income (FY2025) | ₹37,214 Crore |
| Cost-to-Income Ratio | 45.48% |
| Dividend Yield | 2.86% |
Union Bank of India Share Price Target Forecast (2026–2030)
| Year | Target Price Range (₹) |
|---|---|
| 2026 | ₹180 – ₹210 |
| 2027 | ₹200 – ₹240 |
| 2028 | ₹225 – ₹270 |
| 2029 | ₹250 – ₹300 |
| 2030 | ₹275 – ₹330 |
Note: These targets are derived from a synthesis of credible analyst discussions and projections found in the public domain, adjusted for a neutral, educational perspective.
Union Bank of India Share Price Target 2026
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2026 | ₹180 | ₹210 |
- The bank’s exceptional FY2025 performance, marked by a net profit of ₹18,488 crore and a best-in-class ROE of 18.24%, provides a solid foundation.
- Its valuation remains attractive with a P/E of 7.06 and P/B of 1.11, offering a significant margin of safety.
- A healthy dividend yield of 2.86% adds to its appeal as a stable income-generating stock.
Union Bank of India Share Price Target 2027
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2027 | ₹200 | ₹240 |
- Growth will be driven by steady loan book expansion, particularly in the retail and MSME segments, and sustained low credit costs.
- As a government-owned entity, it benefits from policy support and a strong implicit sovereign guarantee.
- Investor sentiment should remain positive due to its leadership position among PSU banks and consistent shareholder returns.
Union Bank of India Share Price Target 2028
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2028 | ₹225 | ₹270 |
- By this stage, the bank’s digital transformation and focus on fee-based income should lead to improved operational efficiency and a lower cost-to-income ratio.
- Its massive scale and nationwide reach provide a durable competitive advantage against private peers in the mass retail segment.
- Market valuation could see modest support if it sustains its high ROE and further improves its CASA ratio.
Union Bank of India Share Price Target 2029
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2029 | ₹250 | ₹300 |
- Long-term investors will be watching for Union Bank’s ability to maintain its credit discipline in a potentially volatile economic environment.
- Its role as a key financier of India’s consumption and infrastructure story ensures its continued relevance.
- Sustained high dividends and capital appreciation would make it a compelling total-return investment.
Union Bank of India Share Price Target 2030
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2030 | ₹275 | ₹330 |
- Sentiment will depend on the bank’s success in balancing growth with asset quality in a maturing banking sector.
- If it can maintain its current ROE of over 18% while deleveraging its balance sheet, it could command a premium over its historical valuation multiples.
- Its position as a financial backbone for millions of Indians makes it a strategic, long-term holding for any portfolio.
Union Bank of India: Shareholding Pattern
| Category | Holding (%) |
|---|---|
| Promoters (Government of India) | 74.76% |
| Foreign Institutions (FII/FPI) | 7.86% |
| Domestic Institutions (DII) | 11.71% |
| Public (Retail & Others) | 5.67% |
The Government of India holds a commanding 74.76% stake, providing immense stability and an implicit sovereign guarantee. There is no pledging of promoter shares, ensuring strong governance.
Union Bank of India: Strengths vs Risks
- Strengths:
- Strong Fundamentals: Best-in-class asset quality (Net NPA of 1.27%) and a robust CAR of 18.02% among PSU banks.
- Consistent Profitability: Delivered 50.7% CAGR in net profit over the last 5 years with a healthy ROE of 18.24%.
- Attractive Valuation: Trades at a discount to many private sector peers with a P/B of just 1.11.
- Sovereign Backing: Ownership by the Government of India ensures policy support and depositor confidence.
- Risks:
- Regulatory Dependence: Subject to government policies on lending, interest rates, and social obligations.
- Macroeconomic Sensitivity: Performance is closely tied to India’s GDP growth and credit cycle.
- Competition: Faces intense competition from agile private sector banks and fintech disruptors.
Investment Suitability
| Factor | Assessment |
|---|---|
| Risk Profile | Low to Moderate (large-cap PSU with stable earnings) |
| Time Horizon | Long-term (5+ years) – quality income and growth story |
| Volatility | Low to Moderate – less volatile than private banks but can be affected by sector news |
| Dividend/Income | Yes – offers a steady dividend yield of 2.86%. |
| Ideal Investor | Conservative to moderate-risk investors seeking a stable, government-backed stock with a reliable dividend income stream and exposure to India’s long-term banking growth. |
Union Bank is best suited for investors who prioritize capital preservation and regular income over high growth.
FAQs
Is it good to invest in the Union Bank of India shares?
Yes, Union Bank is a good buy for conservative, long-term investors. It is a financially stable PSU bank with strong asset quality, consistent profitability, and a reliable dividend history.
Is Union Bank better than SBI?
State Bank of India (SBI) is larger, more profitable, and has a higher ROE (18.57% vs 18.24%). However, Union Bank is often seen as more agile post-merger and trades at a slightly lower valuation. SBI is the safer, more dominant choice; Union Bank offers a compelling value alternative.
What is the target price of Union Bank?
Based on our analysis of its fundamentals and sector outlook, we estimate a 2026 range of roughly ₹180 – ₹210. This “model-based” target reflects projected earnings growth and valuations—it is not guaranteed.
Is Union Bank undervalued or overvalued?
With a P/B of 1.11 and P/E of 7.06—both below its historical averages and justified by its 18.24% ROE—Union Bank does not appear overvalued. It trades at a discount to many private sector peers.
Is Union Bank safe to invest?
Yes, Union Bank is considered a safe investment for long-term portfolios. It is a government-owned bank with strong capital buffers, improving asset quality, and a consistent track record of profitability.
Final Verdict
Union Bank of India stands as a pillar of India’s public sector banking system. Its combination of market leadership, strong capital buffers, improving asset quality, and consistent shareholder returns makes it a compelling choice for long-term, income-focused portfolios. While it may not offer the explosive growth of private banks, its risk-adjusted returns and sovereign backing provide unmatched peace of mind. Our 2026–2030 price targets (₹180–₹330) reflect a path of steady, compounding value driven by dividends and gradual earnings growth, not speculative hype.
Sources
- Screener.in – Union Bank of India Consolidated Financials (FY2025)
- Finology Ticker – UNIONBANK Company Profile & Ratios
- Groww – Union Bank of India Fundamental Data
- Union Bank Annual Report FY2025
