PSU Bank Reports 43% Rise In Net, Buy With Target Price Of Rs 440: Motilal Oswal

Leading public sector bank based in Bangalore Canara Bank on October 26 reported a rise of 42.8% in its net profit to Rs 3606 core for Q2 of the financial year 2023-24 as against Rs 2525.5 crore declared in the corresponding period of last year. Motilal Oswal appears bullish on the Canara Bank shares and assigned buy call with target price of Rs 440 per share.

According to the analyst, "Canara Bank (CBK) reported a healthy quarter, with PAT up 43% YoY to INR36.1b (in line), driven by lower provisions. NII grew 20% YoY (in line), while margins moderated 5bp QoQ to 3.0%." Last trading price of Canara Bank stock on BSE is Rs 380.70 per share. If you buy Canara Bank stock at last trading price, you can get potential return of 15.79%. Check more details below:

Canara Bank Stock Performance & Return: Last trading price of Canara Bank share on BSE is Rs 380.70 apiece. Its 52-week high price is Rs 387.70 per share and 52-week low price is Rs 268.85 per share, respectively. The company's market capitalisation is Rs 69,063.94 crore. Canara Bank shares offered return of 10% in last 3-months, gained 23% in last 6-months, offered return of 31% in last 1-year, and rallied 90% in last 3-years. Canara Bank shares gave maximum return of 332% in last 5-years.
Canara Bank Valuation: According to Motilal Oswal in its brokerage report dated October 26, 2023, "Loan growth was led by Corporate, Retail, and Agri segments and the outlook remains steady. Slippages and SMA book improved sequentially, which supported improvements in asset quality ratios. We raise our estimates slightly and expect CBK to deliver FY25E RoA/RoE of 1.1%/17.6%. Reiterate BUY with a TP of INR440 (premised on 0.9x FY25E ABV)."
Canara Bank Q2: The bank's net interest income soared 19.76% to Rs 8903 crore as net interest margin (NIM) bettered to 3.02%, indicating a surge of 19 basis points. The bank also cut its cost-to-income ratio by 53 basis points, that stood at 43.68%, as per the BSE filing. Canara Bank's retail credit reported a growth of 10.56% as housing loans expanded at 12.32% rate. Education loans and vehicle loans also witnessed growth of 14.68% and 9.29%. On the business front, total loans rose 4% QoQ (up 12% YoY), led by both corporate (up 3% QoQ) and RAM segments (up 5% QoQ). Agri book grew ~6.4% QoQ, while Retail and MSME grew ~4% QoQ each.
Disclaimer: The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.