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Securities has buy call on Canara Bank with a target price of Rs 260. The current market price of is Rs 199.35.

Time period given by analyst is one year when Canara Bank price can reach defined target.

Canara Bank, incorporated in the year 1906, is a banking company (having a market cap of Rs 36264.46 Crore).

Canara Bank key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2021.

Financials

For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 24518.42 Crore, up 7.33 % from last quarter Total Income of Rs 22843.51 Crore and up 3.13 % from last year same quarter Total Income of Rs 23774.15 Crore. The bank reported net profit after tax of Rs 1918.80 Crore in latest quarter.

Investment Rationale
Factoring near term capital infusion, the brokerage expects the bank’s loan book to fatten cautiously at CAGR of 9.2% over FY21-23E, led by corporate book growth. The bank’s credit cost will normalise further by FY23E and estimate return ratio ROA/ROE of 1% and 16% in FY23E. It values the standalone entity at 0.6xFY23E BVPS (₹433) and arrive at a target price of ₹260. It recommends BUY with a potential upside of 30%

Promoter/FII Holdings
Promoters held 62.93 per cent stake in the company as of 31-Mar-2022, while FIIs owned 8.48 per cent, DIIs 13.61 per cent.

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