UCO Bank Ltd witnessed a significant surge in its stock price, reaching a one-year high of Rs 51.60 in Friday’s trading session, marking a 5.65% increase. Over the past five consecutive trading sessions, the stock has shown a remarkable gain of 25.21%. The bank’s Managing Director and CEO, Ashwani Kumar, shared insights during an earnings call, revealing a substantial investment of Rs 702 crore in the renewable sector. He also announced the upcoming launch of a new product for rooftop solar.
Addressing a query about dividends, Kumar mentioned the delay in obtaining permission from the Reserve Bank of India (RBI) last year. The approval from RBI is awaited before any comments on dividends can be made. On the topic of capital raising, Kumar outlined the absence of plans during Q4 FY24, with intentions to approach the board in the next fiscal year for approval and government collaboration, possibly through growth plus or a Qualified Institutional Placement (QIP).
Despite recording a 22.97% decline in net profit for the December quarter of 2023-24 (Rs 503 crore compared to Rs 653 crore in the previous year), the bank reported positive trends in asset quality. Gross NPA reduced by 178 basis points to 3.85%, and net NPA decreased by 68 basis points to 0.98% on a consolidated basis.
Technical analysts provided insights into the stock’s potential movements, suggesting support around Rs 44 and immediate resistance at Rs 52. Notably, analysts advised investors to consider booking profits at the current levels. Shiju Koothupalakkal, a Technical Research Analyst at Prabhudas Lilladher, identified support near Rs 44.50 and projected potential upside targets of Rs 52-55.50. DRS Finvest founder Ravi Singh predicted the stock hitting Rs 55 in the near term, advising a stop loss at Rs 44. AR Ramachandran from Tips2trades highlighted the bullish nature of UCO Bank stock but cautioned about overbought conditions on daily charts, recommending profit booking at current levels.
As of the third quarter, the government holds a 95.39% share in the Kolkata-based lender. The news encapsulates the bank’s recent market performance, strategic plans, and expert opinions for potential investors.