Shares of Canara Bank have delivered multibagger returns in the last three years. Canara Bank stock, which closed at Rs 91.85 on November 12, 2020, hit a 52 week high of Rs 402.50 clocking 338% returns during the period. The stock has zoomed 31.84% in a year and risen 19.37% in two years. The public sector bank stock has posted positive returns for investors across a period of 10 years.
The stock hit a 52-week high in the afternoon session today. The stock rose 3.69% to a yearly high of Rs 402.50 on BSE. Market cap of Canara Bank stood at Rs 72,819 crore. Total 3.40 lakh shares changed hands amounting to a turnover of Rs 13.48 crore.
Rekha Rakesh Jhunjhunwala, wife of late investor Rakesh Jhunjhunwala, held 37,597,600 shares or 2.04 per cent in the public sector lender as on September 30. Her stake in the bank remained unchanged for the last three quarters.
The banking stock hit a 52-week low of Rs 268.85 on February 24, 2023. Canara Bank has a one-year beta of 1.6, indicating very high volatility during the period.
In terms of technicals, the relative strength index (RSI) of the Canara Bank stock stands at 60.8, signaling the stock is trading neither in the oversold nor overbought zone.
Motilal Oswal has assigned a target of Rs 440 to the lender post Q2 earnings.
"Asset quality ratios have improved and the management expects to further reduce net NPAs at an accelerated pace. SMA book moderated to 0.7% in 2QFY24 against 1.1% in 1QFY24. We revise our earnings estimates slightly to factor in lower provisions and expect Canara Bank to deliver FY25 RoA/RoE of 1.1%/17.6%. We reiterate our BUY rating with a target price of Rs 440 (0.9x FY25E ABV)," saids the brokerage.
Axis Securities said the stock can be bought in a range of Rs 372-366 for a target price of Rs 407-418. Stop loss can be fixed at Rs 350.
“Canara Bank broke above the multiple resistance zone at Rs 348 in mid-September, rallying to Rs 387 in the weekly charts. After retesting the breakout area, it bounced back sharply, confirming the continuation of the uptrend. The stock is exhibiting a pattern of higher highs and lows on the weekly chart, forming an upward-sloping trendline, indicating a strong uptrend. The stock experienced a surge in trading volume during the breakout, indicating a substantial increase in market participation at the breakout level. The weekly strength indicator RSI given a crossover above its reference line generated a buy signal,” said Axis Securities.
LKP Securities assigned a price target of Rs 506 for the lender post Q2 earnings.
“The bank’s recoveries are in line with the guidance and expect the credit cost to be below 2% for FY24. Furthermore, the NIMs were flat sequentially to 3.02%. We believe the bank is growing the balance sheet with well-adjusted margins and it is expected to bode well in near term. We believe the bank has recovered well and expected to witness gradual improvement in profitability with FY25E ROA/ROE of 1.1%/17.2%. With an inexpensive valuation (0.87x trailing PBVPS) we recommend BUY,” said the brokerage.
The lender reported a 43% rise in net profit at Rs 3606 crore in Q2 against a profit of Rs 2525 crore in the September 2022 quarter. NII climbed 20% to Rs 8903 crore in Q2 compared to Rs 7433.8 crore in the year-ago period.
Total provisioning slipped to Rs 2,608 crore in the last quarter from Rs 3,637 crore in the year-ago period. Gross non-performing assets (NPAs) declined to 4.76 per cent of total loans in the September 2023 quarter over 6.37 per cent in the year-ago period.
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