2QFY2011 Result Update Banking October 27, 2010 Union Bank of India Performance Highlights Particulars (` cr) 2QFY11 1QFY11 % chg (qoq) 2QFY10 % chg (yoy) NII 1,536 1,348 13.9 863 77.9 Pre-prov. profit 1,131 1,044 8.3 810 39.6 PAT 303 601 (49.6) 505 (39.9) For 2QFY2011, Union Bank reported a disappointing set of numbers, primarily because of a switch over to system-based NPA and provision for pension liability on an ad hoc basis. Consequently, the bank registered a 49.6% qoq and 39.9% yoy decline in net profit to `303cr, substantially below our estimates. We maintain a Neutral rating on the stock. Operating performance on expected lines; slippages disappoint: During 2QFY2011, advances grew by 27.2% yoy but declined marginally by 0.5% qoq, while deposits grew by 19.3% yoy and 3.7% qoq. CASA deposits posted growth of 4.1% qoq and 18.3% yoy, driven by a 5.8% qoq and 29.1% yoy increase in savings deposits. CASA ratio improved marginally to 32.7% in 2QFY2011 (from 32.6% in 1QFY2011). Reported NIM improved by 32bp qoq to 3.35% because of a 48bp qoq improvement in yield on funds to 8.28% and a lower increase of 11bp qoq in cost of funds to 5.06%. Consequently, NII grew by robust 77.9% yoy and 13.9% qoq to `1,536cr. During 2QFY2011, the bank faced substantial asset-quality pressure due to switchover to CBS-based NPA recognition and slippages of ~`727cr in agri and export-oriented industries. Gross NPAs increased by 28.8% qoq to `3,524cr and net NPAs rose by 27.2% qoq to `1,462cr. Gross slippages stood at `1,130cr v/s `623cr in 1QFY2011. Outlook and valuation: In our view, the bank is structurally among the more profitable and competitive PSU banks. We have a positive outlook on the bank due to its robust traction in CASA deposits and relatively fast-expanding branch network, due to which we expect the bank s performance on the NII front to be better than its peers over FY2011 12. However, at the CMP, the stock is trading at 8.3x EPS of `47.2 and 1.7x ABV of `237.1, which we believe factors in the positives. Hence, we maintain a Neutral rating on the stock. Key financials Y/E March (` cr) FY2009 FY2010 FY2011E NII 3,814 4,192 5,797 6,336 % chg 23.6 9.9 38.3 9.3 Net profit 1,727 2,075 2,067 2,385 % chg 24.5 20.2 (0.4) 15.4 NIM (%) 2.8 2.4 2.8 2.7 EPS (`) 34.2 41.1 40.9 47.2 P/E (x) 11.5 9.6 9.6 8.3 P/ABV (x) 2.8 2.3 2.0 1.7 RoA (%) 1.2 1.2 1.0 1.0 RoE (%) 27.2 26.2 21.5 21.0 NEUTRAL CMP `393 Target Price - Investment Period - Stock Info Sector Banking Market Cap (` cr) 19,841 Beta 0.9 52 Week High / Low 427/237 Avg. Daily Volume 114,309 Face Value (`) 10 BSE Sensex 20,005 Nifty 6,013 Reuters Code UNBK.BO Bloomberg Code UNBK@IN Shareholding Pattern (%) Promoters 55.4 MF / Banks / Indian Fls 11.9 FII / NRIs / OCBs 18.6 Indian Public / Others 14.1 Abs. (%) 3m 1yr 3yr Sensex 10.7 22.3 4.0 UBI 21.6 53.3 142.4 Vaibhav Agrawal 022 4040 3800 Ext: 333 vaibhav.agrawal@angelbroking.com Amit Rane 022 4040 3800 Ext: 326 amitn.rane@angelbroking.com Shrinivas Bhutda 022 4040 3800 Ext: 316 shrinivas.bhutda@angelbroking.com Please refer to important disclosures at the end of this report 1
Exhibit 1: 2QFY2011 performance Particulars (` cr) 2QFY11 1QFY11 % chg (qoq) 2QFY10 % chg (yoy) Interest earned 3,952 3,686 7.2 3,206 23.3 Interest expenses 2,416 2,338 3.4 2,342 3.2 NII 1,536 1,348 13.9 863 77.9 Non-interest income 510 435 17.2 555 (8.2) Operating income 2,045 1,783 14.7 1,419 44.2 Operating expenses 915 739 23.7 609 50.3 Pre-prov. profit 1,131 1,044 8.3 810 39.6 Provisions & cont. 599 197 203.6 135 343.7 PBT 532 846 (37.2) 675 (21.2) Prov. for taxes 228 245 (6.8) 170 34.3 PAT 303 601 (49.6) 505 (39.9) EPS (`) 6.0 11.9 (49.6) 10.0 (39.9) Cost-to-income ratio (%) 44.7 41.5 42.9 Effective tax rate (%) 42.9 28.9 25.2 Net NPA (%) 1.2 0.9 0.2 Exhibit 2: 2QFY2011 actual v/s Angel estimates Particulars (` cr) Actual Estimates Var. (%) NII 1,536 1,382 11.1 Non-interest income 510 370 37.8 Operating income 2,045 1,752 16.7 Operating expenses 915 700 30.6 Pre-prov. profit 1,131 1,052 7.5 Provisions & cont. 599 201 198.7 PBT 532 851 (37.5) Prov. for taxes 228 228 0.3 PAT 303 624 (51.3) Credit and deposit growth subdued sequentially During 2QFY2011, advances increased by 27.2% yoy but declined marginally by 0.5% qoq to `1,24,142cr, while deposits grew by 19.3% yoy and 3.7% qoq to `1,77,778cr, resulting in a decline in credit-deposit ratio to 69.8% (from 72.7% in 1QFY2011). Growth in advances was driven by the medium and large corporates segment (34.2% yoy) and the retail segment (33.7 yoy). However, on a sequential basis, growth in advances was muted, with agricultural loans declining by 3.8% and the MSME segment growing by 2.6%. CASA deposits registered growth of 4.1% qoq and 18.3% yoy, driven by 5.8% qoq and 29.1% yoy growth in savings deposits. Current account deposits declined by 0.3% qoq and 3.1% yoy to `16,073cr. The bank s CASA ratio improved marginally to 32.7% in 2QFY2011 (from 32.6% in 1QFY2011). During the quarter, the bank opened 38 branches and 50 ATMs, taking its total network to 2,869 branches and October 27, 2010 2
2,420 ATMs. The steadily growing network, is expected to help the bank in sustaining the CASA. Reported NIM improved by 32bp qoq to 3.35% on account of a 48bp qoq improvement in yield on funds to 8.28% and a lower increase of 11bp qoq in cost of funds to 5.06%. Consequently, NII grew by robust 77.9% yoy and by 13.9% qoq to `1,536cr. During the quarter, the bank had a net extraordinary income of `62cr on account of interest on income tax refunds. After adjusting this one-off, reported NIM would stand at 3.21% and NII would be higher by 65.7% yoy. For FY2011E, management has given the guidance of advances and deposits growth of 25% and 20%, respectively. The deposits guidance has been revised downward from 22% in 1QFY2011 to 20%. We are presently factoring in 17% loan growth and 15% deposits growth for FY2011E. Exhibit 3: Advances and deposits growth muted qoq Deposits (` cr) Advances (` cr) CD ratio (%, RHS) 200,000 73 76 71 71 71 160,000 70 72 120,000 67 65 68 80,000 64 40,000 60 Exhibit 4: CASA improves marginally (%) 34.0 33.4 33.0 33.0 32.3 32.0 31.7 31.0 32.6 32.7 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 30.0 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 Exhibit 5: Advances break-up Medium & Large Corporates 56% MSME 18% Agri 15% Educational Personal 0% 1% Auto 1% Retail12% Housing 7% Others 2% Exhibit 6: Decent pace of network expansion 3,000 2,800 2,600 2,400 2,200 2,000 Branches ATMs (RHS) 2,327 2,369 2,420 2,249 2,130 1,995 1,790 2,661 2,638 2,713 2,759 2,805 2,831 2,869 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 2,500 2,300 2,100 1,900 1,700 1,500 October 27, 2010 3
Non-interest income muted During the quarter, non-interest income declined by 8.2% yoy to `510cr. Apart from the high base effect of treasury gains in 2QFY2010, forex income declined by 44.9% yoy and 15.7% qoq and recoveries from written-off accounts were subdued, growing by 3.8% yoy to `44cr. Going forward, we expect core fee income to remain moderate. Exhibit 7: Break-up of non-interest income Particulars (` cr) 2QFY11 1QFY11 % chg (qoq) 2QFY10 % chg (yoy) CEB 236 200 18.0 217 8.6 Treasury 187 146 28.1 218 (14.2) Forex 43 51 (15.7) 78 (44.9) Recoveries 44 38 14.7 42 3.8 Total 510 435 17.1 555 (8.2) Operating costs up, led by higher employee-related provisions During the quarter, operating expenses increased by 23.7% qoq and 50.3% yoy to `915cr. Growth was driven by a 93.5% yoy increase in employee expenses and 6.6% rise in other operating expenses. The increase in employee expenses in 1HFY2011 was mainly because of `240cr provision on account of second pension option and `127cr provision for higher gratuity limits. Management expects a similar charge on account of pension and gratuity liability in 2HFY2011. As a result of higher operating expenses outpacing the increase in operating income, the cost-to-income ratio deteriorated to 44.7% in 2QFY2011 from 41.5% in 1QFY2011 and 42.9% in 2QFY2010. We have increased our opex estimates for FY2011 and FY2012 by 17.5% and 14.5%, respectively, to factor in the enhanced employee benefit provisions. Exhibit 8: Opex rises because of employee-related provisions Staff exps (` cr) Other opex (` cr) Cost-to-income ratio (%, RHS) 1,000 800 600 400 40.3 44.4 43.8 38.6 40.8 42.9 40.2 39.2 41.5 44.7 48.0 45.0 42.0 39.0 200 225 292 322 313 301 306 325 424 435 592 36.0-33.0 1QFY09 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 October 27, 2010 4
Asset quality deteriorates considerably During the quarter, the bank faced substantial asset-quality pressure with gross NPAs increasing by 28.8% qoq to `3,524cr and net NPAs rising by 27.2% qoq to `1,462cr. Gross slippages during the quarter stood at `1,130cr as compared to `623cr in 1QFY2011. Slippages came from agricultural advances (`417cr) and export-oriented corporates (`310cr). During the quarter, the bank substantially implemented CBS-based NPA recognition. Management expects slippages from agricultural and export-oriented corporates to be a one-off and expects the gross NPA ratio to be below 2.3% by the end of FY2011 from 2.8% at the end of 2QFY2011. The provision coverage ratio, including technical write-offs, stood at 70.0%, down from 71.1% in 1QFY2011. Total restructured assets (under facility-wise method of classification) at the end of 1QFY2011 were `4,977cr, to which there was an addition of `140cr in 2QFY2011, taking restructured assets to `5,117cr at the end of quarter. There were slippages of `36cr from restructured assets during the quarter, taking total slippages from restructured assets to `711cr. Management is expecting slippages to be below 15.0% from the restructured book (under the borrower-wise method of classification) of ~`7,200cr during FY2011E. Exhibit 9: Trend in asset quality Gross NPA (` cr) Net NPA (` cr) NPA coverage (%, RHS) 4,000 3,000 2,000 93.1 91.8 83.1 63.9 88.4 70.7 74.0 71.1 70.1 100.0 80.0 1,000 1,675 116 1,564 127 1,923 326 1,874 677 1,919 223 2,092 613 2,671 965 2,736 1,150 3,524 1,462 60.0-40.0 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 ; Note: NPA coverage % excluding write-offs till 3QFY2010 Stable capital adequacy During the quarter, the bank s capital adequacy ratio (CAR) stood at 12.5%, with Tier-1 capital of 7.9%. In July 2010, the bank received `111cr from the Government of India in the form of PCNPS. Further, management is in talks with the government for an infusion of `1,800cr to meet its expansion plans. October 27, 2010 5
Exhibit 10: Stable capital adequacy (%) 16.0 Tier-I CAR Tier-II CAR 12.0 8.0 5.6 5.0 4.8 4.6 4.7 4.7 4.0 8.2 8.7 8.7 7.9 7.9 7.9-1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 Investment arguments Strong traction visible in CASA deposits We are relatively positive on the bank s CASA growth outlook, owing to the bank s larger branch expansion plans compared to its peers. The bank has been able to sustain CASA above 32% over the past few quarters. During 2QFY2011, the bank registered strong 29.1% yoy growth in savings account deposits, reflecting the strong traction in more sustainable SA deposits. Outlook and valuation In our view, Union Bank is structurally among the more profitable and competitive PSU banks. We have a positive outlook on the bank due to its robust traction in CASA deposits and relatively fast-expanding branch network, due to which we expect the bank s performance on the NII front to be better than its peers over FY2011 12. However, at the CMP, the stock is trading at 8.3x EPS of `47.2 and 1.7x ABV of `237.1, which we believe factors in the positives. Hence, we maintain a Neutral rating on the stock. October 27, 2010 6
Exhibit 11: Key assumptions Particulars (%) Earlier estimates Revised estimates FY2011E FY2011E Credit growth 20.0 18.0 17.0 18.0 Deposit growth 19.0 17.0 15.0 17.0 CASA ratio 31.6 31.3 32.7 32.4 NIM 2.7 2.5 2.8 2.7 Other income growth (10.8) 14.9 (11.1) 14.8 Growth in staff expenses 14.0 18.0 50.0 15.0 Growth in other expenses 14.0 18.0 15.0 15.0 Slippages 1.6 1.4 2.0 1.7 Coverage ratio 70.0 70.0 70.0 70.0 Treasury gain/(loss) (% of investments) 0.3 0.2 0.3 0.2 Exhibit 12: Change in estimates FY2011E Particulars (` cr) Earlier Revised estimates estimates % chg Earlier Revised estimates estimates % chg NII 5,524 5,797 5.0 6,118 6,336 3.6 Non-interest income 1,761 1,756 (0.2) 2,022 2,016 (0.3) Operating income 7,284 7,554 3.7 8,141 8,352 2.6 Operating expenses 2,858 3,358 17.5 3,373 3,861 14.5 Pre-prov. profit 4,426 4,196 (5.2) 4,768 4,490 (5.8) Provisions & cont. 911 1,200 31.7 873 893 2.3 PBT 3,514 2,996 (14.8) 3,895 3,597 (7.6) Prov. for taxes 940 929 (1.2) 1,042 1,212 16.4 PAT 2,574 2,067 (19.7) 2,853 2,385 (16.4) Exhibit 13: P/ABV band 450 400 350 300 250 200 150 100 50 0 Price (`) 0.6x 0.9x 1.2x 1.5x 1.8x Oct-02 Mar-03 Aug-03 Jan-04 Jun-04 Nov-04 Apr-05 Sep-05 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Source: Company, Bloomberg, Angel Research October 27, 2010 7
Exhibit 14: Recommendation summary CMP Tgt. Company Reco. (`) price (`) Upside (%) P/ABV (x) Tgt P/ABV (x) P/E (x) FY10-12E EPS CAGR (%) RoA (%) RoE (%) AxisBk Buy 1,446 1,705 17.9 2.7 3.2 13.9 29.6 1.6 21.1 FedBk Accumulate 463 512 10.6 1.4 1.5 9.7 32.6 1.4 14.8 HDFCBk Accumulate 2,256 2,510 11.3 3.6 4.0 19.0 35.7 1.7 20.4 ICICIBk* Buy 1,106 1,350 22.0 2.2 2.6 17.9 31.0 1.4 15.5 SIB Neutral 29 - - 1.7-10.0 18.0 1.0 17.8 YesBk Accumulate 370 415 12.0 2.9 3.2 17.0 24.4 1.2 18.2 BOI Neutral 519 - - 1.6-8.6 35.2 0.9 19.8 CorpBk Neutral 761 - - 1.4-7.4 12.5 1.0 20.1 DenaBk Accumulate 142 150 5.2 1.2 1.3 6.7 9.2 0.8 19.8 IndBk Accumulate 305 324 6.2 1.4 1.5 7.4 8.4 1.3 21.1 IOB Accumulate 170 187 9.6 1.2 1.3 8.5 24.5 0.7 14.8 OBC Neutral 504 - - 1.3-7.5 21.6 0.9 18.1 PNB Neutral 1,341 - - 1.8-8.8 10.6 1.2 22.3 SBI* Accumulate 3,193 3,556 11.4 2.4 2.6 14.0 24.0 1.1 19.2 UcoBk Neutral 137 - - 1.3-5.9 12.0 0.8 24.9 UnionBk Neutral 393 - - 1.7-8.3 7.2 1.0 21.0 Source: Angel Research; Note: *Target multiples=sotp target price/abv (including subsidiaries) October 27, 2010 8
Income statement Y/E March (` cr) FY06 FY07 FY08 FY09 FY10 FY11E FY12E NII 2,374 2,790 3,086 3,814 4,192 5,797 6,336 - YoY Growth (%) 15.0 17.5 10.6 23.6 9.9 38.3 9.3 Other Income 625 842 1,233 1,483 1,975 1,756 2,016 - YoY Growth (%) (18.4) 34.7 46.4 20.3 33.2 (11.1) 14.8 Operating Income 2,999 3,632 4,319 5,296 6,167 7,554 8,352 - YoY Growth (%) 6.0 21.1 18.9 22.6 16.4 22.5 10.6 Operating Expenses 1,402 1,476 1,593 2,214 2,507 3,358 3,861 - YoY Growth (%) 11.5 5.2 7.9 39.0 13.2 33.9 15.0 Pre - Provision Profit 1,597 2,156 2,726 3,082 3,660 4,196 4,490 - YoY Growth (%) 1.5 35.0 26.4 13.1 18.7 14.7 7.0 Prov. & Cont. 702 776 866 725 826 1,200 893 - YoY Growth (%) (27.0) 10.4 11.6 (16.2) 13.9 45.3 (25.6) Profit Before Tax 895 1,380 1,860 2,357 2,833 2,996 3,597 - YoY Growth (%) 46.3 54.3 34.8 26.7 20.2 5.7 20.1 Prov. for Taxation 219 535 473 630 758 929 1,212 - as a % of PBT 24.5 38.8 25.4 26.7 26.8 31.0 33.7 PAT 675 845 1,387 1,727 2,075 2,067 2,385 - YoY Growth (%) (6.1) 25.2 64.1 24.5 20.2 (0.4) 15.4 Balance sheet Y/E March (` cr) FY06 FY07 FY08 FY09 FY10 FY11E FY12E Share Capital 505 505 505 505 505 505 505 Reserves & Surplus 4,053 4,685 6,843 8,235 9,919 11,542 13,396 Deposits 74,094 85,180 103,859 138,703 170,040 195,546 228,788 - Growth (%) 19.8 15.0 21.9 33.5 22.6 15.0 17.0 Borrowings 3,974 4,216 4,760 3,885 3,125 3,594 4,205 Tier 2 Capital 2,770 2,370 3,750 4,890 6,090 7,125 8,408 Other Liab. & Prov. 3,729 5,509 4,356 4,757 5,483 6,123 7,288 Total Liabilities 89,126 102,464 124,073 160,976 195,162 224,436 262,590 Cash Balances 4,387 5,918 9,455 8,992 12,468 13,688 17,159 Bank Balances 2,003 2,509 643 6,993 3,308 3,805 4,452 Investments 25,918 27,982 33,822 42,997 54,404 60,908 68,812 Advances 53,380 62,386 74,348 96,534 119,315 139,599 164,727 - Growth (%) 33.1 16.9 19.2 29.8 23.6 17.0 18.0 Fixed Assets 810 825 2,201 2,335 2,305 2,572 2,919 Other Assets 2,628 2,845 3,604 3,124 3,361 3,865 4,522 Total Assets 89,126 102,464 124,073 160,976 195,162 224,436 262,590 - Growth (%) 23.0 15.0 21.1 29.7 21.2 15.0 17.0 October 27, 2010 9
Ratio analysis Y/E March FY06 FY07 FY08 FY09 FY10 FY11E FY12E Profitability ratios (%) NIMs 3.1 3.0 2.8 2.8 2.4 2.8 2.7 Cost to Income Ratio 46.8 40.6 36.9 41.8 40.7 44.4 46.2 RoA 0.8 0.9 1.2 1.2 1.2 1.0 1.0 RoE 18.7 19.2 26.8 27.2 26.2 21.5 21.0 B/S ratios (%) CASA Ratio 32.4 34.5 34.9 30.1 31.7 32.7 32.4 Credit/Deposit Ratio 72.0 73.2 71.6 69.6 70.2 71.4 72.0 CAR 11.4 12.8 12.5 11.2 11.7 11.8 11.9 - Tier I 7.3 7.8 7.5 6.9 7.4 7.4 7.4 Asset Quality (%) Gross NPAs 3.8 2.9 2.2 2.0 2.2 3.0 3.1 Net NPAs 1.6 1.0 0.8 0.3 0.8 1.2 1.1 Slippages 1.8 1.4 1.2 1.6 1.8 2.0 1.7 Loan Loss Prov./Avg. Assets 0.2 0.3 0.5 0.4 0.4 0.4 0.2 Provision Coverage 60.3 67.9 63.7 83.1 74.0 70.0 70.0 Per Share Data (`) EPS 13.4 16.7 27.5 34.2 41.1 40.9 47.2 ABVPS 74.9 91.1 107.6 139.7 168.5 201.2 237.1 DPS 3.5 3.5 4.0 5.0 5.5 7.5 9.0 Valuation Ratios PER (x) 29.4 23.5 14.3 11.5 9.6 9.6 8.3 P/ABVPS (x) 5.2 4.3 3.6 2.8 2.3 2.0 1.7 Dividend Yield 0.9 0.9 1.0 1.3 1.4 1.9 2.3 DuPont Analysis (%) NII 2.9 2.9 2.7 2.7 2.4 2.8 2.6 (-) Prov. Exp. 0.9 0.8 0.8 0.5 0.5 0.6 0.4 Adj. NII 2.1 2.1 2.0 2.2 1.9 2.2 2.2 Treasury 0.1 0.1 0.3 0.2 0.3 0.1 0.0 Int. Sens. Inc. 2.2 2.2 2.2 2.4 2.2 2.3 2.3 Other Inc. 0.7 0.8 0.8 0.8 0.8 0.8 0.8 Op. Inc. 2.8 3.0 3.0 3.2 3.0 3.0 3.1 Opex 1.7 1.5 1.4 1.6 1.4 1.6 1.6 PBT 1.1 1.4 1.6 1.7 1.6 1.4 1.5 Taxes 0.3 0.6 0.4 0.4 0.4 0.4 0.5 RoA 0.8 0.9 1.2 1.2 1.2 1.0 1.0 Leverage (x) 22.3 21.7 21.9 22.5 22.5 21.8 21.4 RoE 18.7 19.2 26.8 27.2 26.2 21.5 21.0 October 27, 2010 10
Research Team Tel: 022-4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com DISCLAIMER This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report. Disclosure of Interest Statement Union Bank of India 1. Analyst ownership of the stock No 2. Angel and its Group companies ownership of the stock No 3. Angel and its Group companies' Directors ownership of the stock No 4. Broking relationship with company covered No Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors. Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%) Reduce (-5% to 15%) Sell (< -15%) October 27, 2010 11