Motilal Oswal's research report on Canara Bank
Canara Bank (CBK) reported 2QFY25 standalone PAT at INR40b (11.3% YoY growth, 6% beat) driven by lower opex. NII rose 4.6% YoY to INR93.2b (in line). NIM moderated 4bp QoQ to 2.86% during the quarter. Loan book grew 10.3% YoY/4% QoQ to INR9.8t, while deposit growth was modest at 9.3% YoY/0.9% QoQ to INR13.5t. CASA ratio stood at ~31.3% in 2QFY25. Management guided 11% credit growth for FY25. On the asset quality front, total slippages moderated to INR23.4b (INR33.4b in 1QFY25). GNPA and NNPA ratios improved 41bp and 25bp QoQ to 3.73% and 0.99%, respectively. PCR stood at 74.1%. We broadly retain our projections and estimate CBK to deliver FY26E RoA/ RoE of 1.08%/18.9%. Reiterate BUY with a TP of INR125 (premised on 1.1x FY26E ABV).
Outlook
We broadly retain our numbers and estimate CBK to deliver FY26E RoA/RoE of 1.08%/18.9%. Reiterate BUY with a TP of INR125 (premised on 1.1x FY26E ABV).
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