In a year marked by some volatility, Canara Bank has seen its shares reach a yearly high, growing by 58%. The bank's shareholder, Rekha Rakesh Jhunjhunwala, holds a 2.04% stake in the company. The one-year beta of the bank's shares stands at 1.7, indicating the level of volatility relative to the market.
The stock's Relative Strength Index (RSI) is currently at 41.4, suggesting balanced trading activity. This index is often used by traders to gauge the momentum and speed of a stock's price movement.
In the second quarter, Canara Bank reported a significant increase in net profit which rose to Rs 3,606 crore ($484 million). Following this announcement, Motilal Oswal set a target price for the bank's shares at Rs 440 ($5.9).
The bank also experienced growth in its Net Interest Income (NII), which rose by 20% to Rs 8,903 crore ($1.2 billion) during Q2. At the same time, total provisioning and gross Non-Performing Assets (NPAs) fell to Rs 2,608 crore ($350 million) and 4.76% respectively, indicating improved financial health.
Axis Securities has recommended purchasing Canara Bank's stock between Rs 372-366 ($5-$4.9), with a target price of Rs 407-418 ($5.5-$5.6) and a stop loss at Rs 350 ($4.7). This advice comes as the bank continues to show strong performance despite some market volatility.
InvestingPro Insights
InvestingPro data reveals that Canara Bank has been showing some promising trends. The bank's revenue growth has been accelerating, which aligns with the reported increase in its Net Interest Income (NII). Additionally, the bank has been consistently increasing its earnings per share, a positive sign for potential investors.
However, there are some areas of concern. InvestingPro's analysis shows that Canara Bank has been quickly burning through cash and may have low earnings quality, with its free cash flow trailing net income. This could potentially impact the bank's ability to maintain its dividend payouts, especially if poor earnings and cash flow continue.
InvestingPro Tips also highlight that despite these concerns, the bank's stockholders receive high returns on book equity. This, coupled with the bank's strong performance over the last three months, and the fact that it's a prominent player in the banking industry, makes it an interesting consideration for investors.
For more detailed insights and tips, consider exploring InvestingPro's product that includes over 14 additional tips for Canara Bank. This could provide a more comprehensive understanding of the bank's financial health and market position.
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