By Aditya Raghunath
Investing.com -- Public sector lender Canara Bank Ltd (NS: CNBK ) reported its numbers for Q1 FY22, and net profit was up almost three times at Rs 1,177.47 crore compared to Rs 406.24 crore in the corresponding quarter in FY21. Total income for the June 2021 quarter was Rs 21,210.06 crore, a slight increase from Rs 20,685.91 crore in the June 2020 quarter.
Canara bank also said that it will raise Rs 9,000 crore through a debt-equity combination to increase its capital base to fund growth in FY22.
However, Morgan Stanley (NYSE: MS ) is underweight on the stock with a target price of Rs 155, just 8% up from its July 28 closing price of Rs 143.25. A CNBC TV18 report said that the firm thinks that Canara Bank’s coverage and capital ratios are lower than its peers and its asset quality is uncertain when you take into account high slippages and restructuring.
The brokerage thinks that slippages are a concern despite Canara Bank’s GNPAs (gross non-performing assets) falling to 8.5% at the end of June 2021 from 8.84% at the end of June 2020.
June 2020 was when Canara Bank amalgamated Syndicate Bank (NS: SBNK ) into itself. The stock has gained around 10% in 2021.
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