- Canara Bank triples to Rs. 1,333 crore net profit.
- Rakesh Jhunjhunwala bought 29,097,400 shares of Canara Bank in the September quarter.
- The total value of Jhunjhunwala’s share as on Wednesday was Rs. 584 crores.
Analysts say despite moderate credit growth and soft net interest margins, profits brushed off the rumours by a large margin. Despite some concerns about a larger account, they are targeting the stock to go up 40 per cent from Tuesday’s closing price.
In the September quarter, Jhunjhunwala bought 29,097,400 shares, or 1.60 per cent, of Canara Bank. The total value of his shares on Wednesday was Rs. 584 crores.
Brokerage firm Emkay Global said, “The loan of Rs 6,900 crore more than expected came as a hindrance, but this included Shree Group (Rs 3,200 crore), for which the bank provided 50 per cent.” However, GNPA declined marginally to 8.4 per cent due to higher recovery/upgradation. The restructuring bridge fell to Rs 18,000 crore and nothing was left. It has maintained buy rating on Canara Bank stock. That said, profits have been higher than expected. The main reasons behind this are increase in treasury earnings, reduction in provisioning and recovery from DHFL. The firm raised its stake in Canara Bank to Rs. Advised to buy with a target of 230.
Another brokerage firm Motilal Oswal has also given a buy advice on Canara Bank shares. It has given a target price of Rs 270 for the stock. That said, Canara Bank’s non-performing assets are likely to decline. Along with this, the bank will also benefit from reduction in credit cost.
Kotke also gave Canara Bank Rs. 150 to Rs. Upgraded to ‘Ad’ with a target of 210. This has given the bank 0.8 times adjusted book value in September 2023, while it expects RoE to reach 8 to 10 per cent in the medium term.