Given the track record of the management in achieving the guided figures and comfort in valuation, long-term investors can accumulate the stock in dips.
The shares of Canara Bank, India’s fourth-largest PSU Bank by loan book, have been on a bull run ever since the rebound after Covid-lows. From the lows of March 2020 to the recent highs in early June this year, the stock has grown about 8.5 times at a staggering CAGR of 66 per cent. This comes on the back of balance sheet clean-up, resulting in improvements in asset quality.
The gross NPA (GNPA) ratio, which was at 8.8 per cent as of FY19 and peaked at 8.9 per cent in FY21, has declined to 3.7 per cent as of Q2 FY25. The return on equity (RoE) also has improved in due course from 1.4 per cent as of FY19 to 20.4 per cent (H1 FY25 annualised).
Source: The Hindu Business Line