Canara Bank Soars 7% to hit 52 week high on impressive financial results

Today, shares of Canara Bank hit a 52-week high amid strong financial results for the second quarter of FY24. On a consolidated basis, in Q2FY24 the bank recorded a robust financial performance with a 41.79% year-on-year increase in net profit, reaching Rs 3,677.39 crore, compared to Rs 2,593.49 crore in the corresponding quarter of the previous year. During the second quarter of FY24, the bank total net revenue showed an increase of 23.90%, from Rs 27,353.37 crore to Rs 33,891.21 crore, compared to the same quarter in the preceding year.

Sequentially, the net profit for the quarter ending on September 30, 2023, showed an increase of 2.91% from Rs 3,573.50 crore. However, in Q2FY24, the bank total net revenue registered a 5.06% increase compared to the previous quarter, settling at Rs 32,259.41 crore.

Regarding the bank’s highlights for the quarter, the Gross Non-Performing Assets (GNPA) ratio improved to 4.76%, down from 5.15% in June 2023 and 6.37% in September 2022. Similarly, the Net Non-Performing Assets (NNPA) ratio also showed improvement, standing at 1.41% in September 2023, down from 1.57% in June 2023 and 2.19% in September 2022.

RAM Credit witnessed significant growth, increasing by 13.63% to Rs 5,16,949 crores, constituting 56% of the total advances. Retail Credit also grew by 10.56%, with housing loans experiencing a notable 12.32% growth. Education loans increased by 14.68% year-on-year, and vehicle loans by 9.29% year-on-year.

Return on Assets (ROA) improved to 1.01% for Q2FY24 compared to 0.71% for Q2FY23, indicating better asset utilization. Return on Equity (ROE) also showed improvement, increasing to 22.51% for Q2FY24 from 17.37% in Q2FY23.

Yesterday, the stock closed at Rs 359.85. Today, it opened at Rs 361.05 and is currently trading at Rs 386.10, up by 7.29%. The bank’s shares reached a fresh 52-week high today at Rs 387.70, with a 52-week low at Rs 268.85. The bank currently commands a market capitalization of approximately Rs 70,000 crore, with shares having generated a one-year return of 32.98%.

Canara Bank, over the course of its one-hundred-year history, has experienced many stages of its growth trajectory. Canara Bank saw spectacular growth, particularly after being nationalized in 1969, when it attained the status of a national player in terms of geographic reach and clientele groups. The bank’s businesses are mainly in four areas: Personal Banking, Corporate Banking, NRI Banking, and the SME sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.