Union Bank Q1: consolidated PAT up 27% YoY to ₹5,642 Cr, beats street as provisions ease
PAT +27.4% YoY · revenue +1.2% · margins expanding · beat vs street
₹27,427.1 Cr
+1.2% YoY
₹5,641.52 Cr
+27.4% YoY
17.27%
+4.5pp YoY
₹7.39
Union Bank of India opened FY27 with a margin-led profit beat. Consolidated net profit for Q1 FY27 came in at ₹5,642 Cr, up 27.4% year-on-year (from ₹4,428 Cr) and 2.5% sequentially, with consolidated EPS of ₹7.39 versus ₹5.80 a year ago; the standalone bank earned ₹5,332 Cr, +29.6% YoY. This comfortably beat the street — Motilal Oswal had modelled standalone PAT of about ₹4,485 Cr (+9% YoY) and operating profit near ₹7,247 Cr, and the actuals (₹5,332 Cr PAT, ₹8,003 Cr operating profit) ran roughly 19% and 10% ahead respectively.
Q1 FY-2027 vs prior quarters
The quality of the print is entirely in the P&L below the topline. Interest earned was near-flat at ₹27,427 Cr (consol, +1.2% YoY) and total income rose just 2.2% to ₹32,660 Cr, so revenue was not the story. Net interest income (standalone) grew ~10.1% to ₹10,037 Cr and operating profit rose 15.9% to ₹8,040 Cr (consol), but the real lever was provisions: standalone provisions & contingencies fell 41% to ₹979 Cr from ₹1,665 Cr a year ago as asset quality improved — gross NPA down to 2.65% (from 3.52%), net NPA 0.47%, and provision coverage a strong 95.05%. That combination pushed the net profit margin to 17.27% from 13.85% a year earlier and lifted annualised RoA to 1.36% (from 1.11%).
The stock went into the print at ₹171.17, down 0.1% over the past month of trading.
For context: this is the highest quarterly PAT in the last 6 quarters on our records; PAT has now risen for 3 consecutive quarters.
Management guides for 13-14% credit growth in FY27, aiming to perform slightly better than the industry average. They intend to defend the current Net Interest Margin (NIM) of ~2.64% with potential for improvement, driven by a strategic shift towards higher CASA and retail term deposits. Consequently, Net Interest Inco
— This quarter: met
Against management's own FY27 guidance the quarter is on track: advances grew 13.3% YoY to ₹10.72 lakh Cr, squarely inside the 13-14% credit-growth guide, and the implied credit cost is running well below the ~1% guidance. The soft spot is the liability side — global deposits rose only ~3.5% YoY, and it was exactly this weak deposit and business-growth print in the July-2 quarterly update that had sent the stock down ~7% before results. The management's guidance to defend NIM at ~2.64% via a CASA/retail-term-deposit shift is the swing factor here, and the street already pencils in a small ~4 bps QoQ NIM dip. Capital remains ample (CRAR 19.15% consol, CET-1 17.08%).
What to watch
W1
NIM defense: management guides to hold ~2.64% NIM; street already models a ~4 bps QoQ dip — watch the Q2 print given the deposit-cost pressure.
W2
Deposit mobilisation: deposits grew only ~3.5% YoY vs advances +13.3%; CASA/retail-term-deposit traction is needed to fund the 13-14% loan-growth guide.
W3
Credit cost: Q1 provisions imply a run-rate well under the ~1% FY27 guidance; watch whether the ₹800 Cr contingency buffer keeps building or gets released into profit.
Bank-format P&L; converted from ₹ Lakh (÷100). No exceptional items either period. Consolidated PAT ₹5,641.52 Cr = ordinary PAT ₹5,368.17 Cr + ₹273.35 Cr associate profit share (Andhra Pradesh Grameena Bank); nil minority interest. Records' year-ago consol netProfit (₹4,136.57 Cr) is the pre-associate 'H' line — true comparable is ₹4,427.94 Cr (EPS-consistent 5.80→7.39), so consolidated YoY is +27.4%, not +36%. revenueFromOperations = Interest Earned; totalExpenses = totalIncome−PBT (includes ₹979 Cr provisions). Non-P&L items: ₹100 Cr contingency-provision top-up (buffer now ₹800 Cr), ₹1,701.40 Cr IFR transferred to general reserve, ₹850 Cr Tier-II bond called.
Informational and educational content only. Not investment advice.