Motilal Oswal's research report on Canara Bank
Canara Bank (CBK) reported mixed operating performance with NII growing 25% YoY (5% miss); however, healthy treasury gains enabled in-line growth in total revenue. Margin improved 10bp QoQ to 2.9% while PPoP grew 19% YoY (Core PPoP rose 13% YoY). On the business front, CBK reported a marginal 2% QoQ growth in advances after a strong 7% sequential growth in 3QFY22, led by revival in corporate loan book. In 4QFY22, corporate book dipped marginally while growth came on the back of improved traction in RAM segments – Retail, Agri and MSME. Fresh slippages stood elevated at INR47.4b, while healthy recoveries and upgrades of INR29.8b along with higher write-offs worth INR29.9b led to improvements in asset quality ratios. GNPA/NNPA improved 29bp/21bp QoQ to 7.51%/2.65%, respectively. Vehicle loans and agri book saw higher GNPA while other segments witnessed moderation in GNPA.
Outlook
Further, SMA overdue declined to 1.53% from 1.76% in 3QFY22, while restructured portfolio improved marginally to 2.77% of loans. We expect CBK to deliver FY24E RoA/RoE of 0.7%/~13% and value the stock at INR280 (premised on 0.8x FY24E ABV). Reiterate BUY.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Copyright © e-Eighteen.com Ltd All rights resderved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol.com is prohibited.
Read More
