After the results, the brokerage house has given a new target of Rs 300, advising to invest in Canara Bank’s stock. The profit of the bank has been more than double. At the same time, along with asset quality, there has been an improvement in margins as well.
Today, flat trading is being seen in the shares of Canara Bank of PSU sector. In the business, the stock has reached a price of Rs 243 with a slight increase, whereas yesterday closed at Rs 240. Canara Bank has presented strong results for the December quarter and the bank’s profit has increased by 115 percent on a year-on-year basis. After the results, brokerage house Motilal Oswal has given a new target of Rs 300, advising investment on the stock. The brokerage says that the performance of the bank has been excellent due to loan growth. Asset quality has also improved. Strong growth is expected in the stock going forward. Rakesh Jhunjhunwala holds 1.6 per cent stake in Canara Bank. He holds 29,097,400 shares of the bank.
Margin and asset quality improvement
According to the brokerage house, the December quarter has been very good for Canara Bank. During this period, along with the asset quality of the bank, there has been an improvement in the margin as well. Overall performance was better on the back of strong loan growth. The bank also has healthy growth in the corporate portfolio, while RAM is showing steady growth. The asset quality ratio is seeing an improvement due to higher recovery. Slippage is under control. The brokerage house has given a target of Rs 300 for the stock. If we look at Thursday’s closing of Rs 240, then it is expected to give 25 percent return.
loan book strong
The brokerage house says that the loan book of the bank has strengthened. The loan book has seen a growth of 7 percent on a quarterly basis. The corporate portfolio has strengthened mainly in the NBFC segment. Advance growth has been around double digits. However, other income has declined by 13 per cent on a yearly basis.
How much was the profit of the bank
Canara Bank’s profit grew by about 115 per cent year-on-year in the December quarter. The bank has made a profit of Rs 1502 crore during this period. The interest income of the bank grew by 14.1 per cent year-on-year to Rs 6945 crore in the December quarter. The provisioning of the bank has come down from Rs 3,360 crore to Rs 2,245 crore. The provision coverage ratio of the bank has increased from 82.44 per cent to 83.26 per cent on a quarterly basis.
The gross NPA of the bank has come down from 8.42 per cent to 7.80 per cent on a quarterly basis. At the same time, Net NPA has come down from 3.21 percent to 2.86 percent during this period. Gross NPAs came down from Rs 57,853 crore to Rs 56,893 crore on a quarterly basis in rupee terms. Whereas Net NPA has come down from Rs 20,862 crore to Rs 19,819 crore.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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