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CUB: IFC Energy Efficiency Funding Will Support MSME Lending While Outlook Stays Balanced

Digital Inclusion And MSME Lending Will Redefine Banking In India

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CUB
AnalystConsensusTarget
Not Invested
Published 02 Feb 2025

Update shared on 09 Dec 2025

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Analysts have nudged their price target on City Union Bank slightly higher to ₹262.77, reflecting marginal improvements in discount rate assumptions and sustained confidence in the bank's long term revenue growth and profit margin outlook.

What's in the News

  • City Union Bank secured a USD 50 million financing commitment from the International Finance Corporation to support MSMEs in adopting energy efficient and cost effective solutions (Key Developments)
  • The IFC agreement, executed on October 31, 2025, is expected to bolster the bank's MSME lending franchise and align with sustainability focused growth initiatives (Key Developments)
  • The bank has scheduled a board meeting on November 3, 2025, to consider and approve its standalone unaudited financial results for the quarter and half year ended September 30, 2025, subject to limited review by joint statutory central auditors (Key Developments)

Valuation Changes

  • The Fair Value Estimate remains unchanged at ₹262.77 per share, indicating no material reassessment of intrinsic value.
  • The Discount Rate has fallen slightly from 14.77 percent to 14.76 percent, reflecting a marginally lower perceived risk profile or cost of equity.
  • The Revenue Growth Forecast is effectively unchanged at 10.45 percent, suggesting a stable growth outlook.
  • The Net Profit Margin Assumption remains steady at 45.80 percent, pointing to consistent profitability expectations.
  • The Future P/E Multiple has eased marginally from 14.99x to 14.98x, indicating a negligible adjustment in valuation multiples applied to forward earnings.

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Disclaimer

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