Canara Bank Q1 Results Review - Margins Moderate; Earnings Steady: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.Canara Bank reported lower than expected net interest income growth at 6% YoY with 17 bps sequential decline in reported NIM to 2.9%. Profits were in-line, as higher other income and low credit costs offset the impact. NIM was partly impacted by accounting change around penal interest, which is now recognized under other income. Sequential loan growth at 2% was led by 12% QoQ growth in retail credit, mainly led by gold loans. We expect the benefits of recoveries on P&L (both from gross non-performing asset and WO pool) to gradually start fading, thereby hurting the earnings profile. Canara Bank also has lower provision coverage ratio (at 71%) and limited standard provision buffers relative to public sector bank peers.Tweaking estimates, we factor in slightly lower credit costs at 11.1% over FY25/26E. With unrevised target price of Rs 105 (1.1 times FY26E price-to-book value), we maintain our ‘Sell’ rating driven by rich valuations (1.1x FY26E) against RoA/RoE of 1%/16% for FY25E. .Click on the attachment to read the full report:.Canara Bank Q1 Results: Profit Up 10.5% On Lower Provisions.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Canara Bank Q1 Results Review - Margins Moderate; Earnings Steady: Dolat Capital

The brokerage maintains ‘Sell’ rating driven by rich valuations against RoA/RoE of 1%/16% for FY25E.

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Canara Bank Q1 Results Review - Margins Moderate; Earnings Steady: Dolat Capital

The brokerage maintains ‘Sell’ rating driven by rich valuations against RoA/RoE of 1%/16% for FY25E.

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