Moneycontrol
Last Updated : Jul 26, 2018 09:45 AM IST | Source: Moneycontrol.com

Canara Bank jumps 5% after solid Q1 results; Kotak Securities maintains add with target Rs 300

During the quarter, NII -- the difference between interest earned on loans and that paid on deposits jumped 43 percent YoY to Rs 3,882.9 crore from Rs 2,713 crore in the June quarter last year.

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Shares of Canara Bank added over 5 percent in the early trade on Thursday as company posted strong numbers for the first quarter ended June 2018.

The company has reported a 12 percent year-on-year (YoY) rise in net profit at Rs 281.49 crore in Q1FY19 against profit of Rs 252 crore in the year-ago period.

The Q1FY19 profit growth was helped by a healthy growth in net interest income (NII) and a decline in bad loans from the previous quarter.

In the previous quarter ending March 2018, Canara Bank had made a huge loss of Rs 4,860 crore on account of substantially higher provisions to cover bad loans.

During the quarter, NII -- the difference between interest earned on loans and that paid on deposits jumped 43 percent YoY to Rs 3,882.9 crore from Rs 2,713 crore in the June quarter last year.

The improvement in NIM of the bank to 2.52 percent, from 2.34 percent a year ago, has contributed significantly to the 43 percent growth in the net interest income during the year.

The stressed assets ratio is sequentially down to 12.1 percent from 12.7 percent and provision coverage ratio has improved to 60.69 percent from 54.52 percent.

Brokerage: Macquarie | Rating: Underperform | Target: Rs 200

The research house Macquarie has maintain underperform rating on Canara Bank with target of Rs 200 per share.

The company's net profit beats the estimates on lumpy recoveries in Q1.

The research house believes that making quarterly forecasts may be difficult in light of the lumpiness of resolutions. The company management expects SME stress to ease in Q2/Q3.

Brokerage: Kotak Securities | Rating: Add | Target: Rs 300

Kotak Securities has maintained add call on Canara Bank with target of Rs 300 per share.

The gross NPLs shows the final sign of reversals and possibility of further improvement. Also, gradual shift in focus from slippages to aid valuation expansion.

Kotak Securities expects stock price to show a positive momentum as these events unfold.

At 09:27 hrs Canara Bank was quoting at Rs 268.95, up Rs 10.05, or 3.88 percent on the BSE.

Posted by Rakesh Patil
First Published on Jul 26, 2018 09:42 am
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