A couple of brokerages recommended shares price targets of up to Rs 425 on the counter, hinting at up to 25 percent upside potential. Motilal Oswal, which has reiterated a ‘Buy’ rating on Canara Bank with a target price of Rs 425, said margins stood broadly flat, while asset quality witnessed a steady improvement.
State-run Canara Bank, a Jhunjhunwala portfolio stock, reported a steady performance as earnings beat estimates, led by higher ‘other income’ and lower provisions. The net interest income (NII) grew 28 percent year-on-year (YoY), in line with estimates, while margins moderated marginally by 2 basis point quarter-on-quarter (QoQ) to 3.05 percent.
A couple of brokerages recommended shares price targets of up to Rs 425 on the counter, hinting at up to 25 percent upside potential.
“Loan growth was primarily led by Corporate, Retail, and Agri segments and the outlook remains positive. While slippages and SMA book increased sequentially, there has been significant improvement in asset quality ratios overall,” Motilal said in a research report.
Emkay has retained a ‘Hold’ rating on the stock, with a revised target price of Rs 375 per share. “Going forward, the bank expects growth to track around current levels and margin to uphold at 3 percent, given the benefit of MCLR repricing partly offsetting the increase in cost of funds (CoF),” it said.
The Bengaluru-headquartered bank on Monday announced that its standalone net profit soared 75 percent YoY to Rs 3,535 crore for the June quarter. The same was Rs 2,022 crore in the year-ago period.
The lender’s operating profit (before provisions and contingencies) rose 15 percent YoY to Rs 7,604 crore in the quarter under review. It was Rs 6,606 crore in the corresponding quarter of last fiscal.
On Tuesday, Canara Bank shares were trading 1.19 percent lower at Rs 335.70 apiece on the NSE. The stock has soared about 50 percent in the last one year, whereas the scrip has remained on a year-to-date basis.
Rekha Jhunjhunwala, the wife of late ace investor Rakesh Jhunjhunwala, stayed put on Canara Bank as she held 37,597,600 or 2.07 percent stake in the state-run bank as on June 30, the same as March 31.
First Published: Jul 25, 2023 11:33 AM IST
