1. At a Glance
UCO Bank just posted a ₹607 Cr PAT in Q1 FY26 with GNPA falling to 2.63%. From being the walking meme of NPAs, this PSU bank is now strutting around like a reform story. Still trading at just 1.25x book value, while larger peers rally.
2. Introduction with Hook
Remember when UCO Bank was synonymous with “Under Capitalized Organisation”? Fast forward to Q1 FY26 — GNPA down to 2.63%, PAT above ₹600 Cr, and capital adequacy of 18.39%.
- Last 5 years PAT CAGR: 25%
- 3-year stock CAGR: 40%
- 10-year ROE: LOL. But last year? 8%
This ain’t your 2017 PSU bank anymore.
3. Business Model (WTF Do They Even Do?)
UCO Bank is a full-service government-owned bank, operating through:
- Corporate Banking (~35%)
- Treasury (~35%)
- Retail Banking (~29%)
It’s your classic public sector bank, with a not-so-classic twist: it’s cleaning up its mess faster than your cousin deleting WhatsApp messages post-breakup.
4. Financials Overview
| Metric | FY24 | FY25 (TTM) | Q1 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 21,854 | 25,479 | 6,436 |
| PAT (₹ Cr) | 1,654 | 2,501 | 607 |
| ROE (%) | 6% | 8% | 8.38% |
| Net NPA (%) | 0.50% | 0.45% | 0.45% |
| GNPA (%) | 2.69% | 2.63% | 2.63% |
The bank’s P&L now actually looks like one, and not a budget horror movie script.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹31.7 |
| Book Value | ₹25.5 |
| P/BV | 1.25x |
| PE (TTM) | 15.9x |
| Market Cap | ₹39,813 Cr |
EduFair Value Range (based on peer average of ~1.6–2x BV for profitable PSU banks):
- Conservative 1.6x BV: ₹40.8
- Aggressive 2x BV: ₹51
Fair Value Range: ₹40–₹51
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Result: ₹607 Cr PAT, strong 13.5% YoY business growth
- GNPA down from 7.42% (Jun ’22) to 2.63%
- No fundraising required, CRAR at 18.39%
- FIIs and DIIs inching up after years of no-show
Upcoming triggers:
- Possible inclusion in PSU ETF rebalance
- Govt recapitalisation? Unlikely but possible
- DII inflows + public sector rotation play
7. Balance Sheet
| Item | FY25 (₹ Cr) |
|---|---|
| Equity Capital | 12,540 |
| Reserves | 18,465 |
| Deposits | 2,93,542 |
| Borrowings | 28,687 |
| Investments | 94,272 |
| Net Advances | ~2,30,000 |
| Total Assets | 3,62,481 |
Strong deposit base. Loan book is growing cautiously. Liquidity position? Solid.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹2,983 | -₹67 | -₹336 | ₹2,580 |
| FY24 | ₹1,002 | -₹275 | -₹430 | ₹297 |
| FY25 | ₹1,913 | -₹680 | ₹5,870 | ₹7,102 |
Cash flow bounce in FY25 due to financing — possible Tier 2 capital or bond raise. But operations now cash-positive consistently.
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE (TTM) | 8.38% |
| ROA (TTM) | 1.25% |
| CRAR | 18.39% |
| Net NPA | 0.45% |
| GNPA | 2.63% |
Translation:
PSU + low NPA + double-digit CAR = the rare clean PSU bank. Someone call Guinness.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | Interest Cost | Opex | PAT |
|---|---|---|---|---|
| FY23 | ₹17,651 Cr | ₹10,307 Cr | ₹6,729 Cr | ₹1,862 Cr |
| FY24 | ₹21,854 Cr | ₹13,754 Cr | ₹8,517 Cr | ₹1,654 Cr |
| FY25(TTM) | ₹25,479 Cr | ₹15,699 Cr | ₹10,431 Cr | ₹2,501 Cr |
From a chronic red bottom line to steady black ink. Not sexy, but trustworthy — like a Maruti WagonR.
11. Peer Comparison
| Bank | CMP ₹ | P/BV | ROE % | GNPA % | PE |
|---|---|---|---|---|---|
| SBI | 824.2 | 1.51 | 17.2 | 2.48% | 9.5 |
| Canara | 112.0 | 0.96 | 17.7 | 3.57% | 5.8 |
| PNB | 112.6 | 0.97 | 15.2 | 4.14% | 7.0 |
| Indian Bank | 634.8 | 1.20 | 17.1 | 2.69% | 7.6 |
| UCO Bank | 31.7 | 1.25 | 8.38 | 2.63% | 15.9 |
Verdict: Profitability still lags, but NPAs are in control. Valuation is now chasing hope — not hype.
12. Miscellaneous – Shareholding, Promoters
| Stakeholder | Jun ’23 | Jun ’25 |
|---|---|---|
| Promoter | 95.39% | 90.95% |
| FIIs | 0.03% | 0.13% |
| DIIs | 1.35% | 4.74% |
| Public | 3.20% | 4.17% |
Key Insight:
- Promoter (GoI) holding dipped due to disinvestment
- DIIs entering — that’s a big shift in sentiment
- Retail investors now 8.4L+ strong. God bless them.
13. EduInvesting Verdict™
UCO Bank is that kid who was failing every subject in class 10 but now quietly cracking CA exams.
It has:
- Fixed its balance sheet
- Reduced NPAs to multi-decade lows
- Delivered consistent PAT above ₹600 Cr
- Achieved decent ROE, and may touch double digits soon
EduTake:
If you’re looking for the next PSU rerating story, UCO might just be the one no one’s watching. It’s still undervalued compared to peers, but you have to bet that management stays the reform path.
One wrong quarter, and it could be back in the ICU. But until then — it’s UCO, not “Uh-oh.”
Metadata
– Written by EduInvesting Team | 21 July 2025
– Tags: UCO Bank, PSU Bank, Q1FY26, NPA Improvement, Turnaround Stocks, Banking Sector Analysis
