Canara Bank Q1 profit up 11% to ₹3,905 cr

PSU lender Canara Bank's net profit surged 10.47% year-on-year to ₹3,905 crore in Q1 FY25 (April-June quarter) compared to ₹3,534 crore in the same quarter of last year, according to an exchange filing. The PSU bank's net interest income (NII) surged 6% YoY to ₹9,166 crore vs ₹8,666 crore in the year-ago period.

The operating profit in the said quarter was recorded at ₹7,616 crore vs ₹7,606 crore in the year-ago period. The bank's gross NPA ratio slipped 101 bps to 1.24% in Q1 FY25, down 33 bps 1.57% in the June 2023 quarter.

The bank's provision coverage ratio (PCR) was 89.22% as of the June 2024 quarter against 88.04% in the year-ago quarter. CRAR (capital-to-risk weighted assets ratio) of the bank stood at 16.38% as of June 2024.

In terms of business performance, Canara Bank's global business surged 11.07% (y.o.y) in Q1 FY25, with global deposits were up at 11.97% (y.o.y). The bank's retail lending portfolio increased by 23.54% to ₹1,75,794 crore as of June 2024, while the housing loan portfolio increased by 11.90% to ₹96,108 crore.

As of June 30, 2024, the bank had 9,623 branches, out of which 3106 were rural, 2,760 semi-urban, 1914 urban and 1,843 metro, along with 10,014 ATMs. The bank also has 4 overseas branches in London, New York, Dubai and Gift City.

Canara Bank's shares are trading 0.13% up at ₹112.65 on the BSE. The shares are currently trading lower than a 52-week high of ₹129.35 touched on June 4, 2024. At the current share price, the PSU bank's m-cap stands at ₹1,02,090.18 crore. Canara Bank shares have seen a 69.06% rise in the past year, while the scrip surged 27.15% in the year-to-date period. In the past six months and one month, the scrip saw a 20.89% surge and a 4.69% fall, respectively.

Canara Bank's (CBK) reported Q4 FY24 standalone profit was ₹3,760 crore, up 18% YoY, driven by higher other income, while NII grew 11.2% YoY. The bank's margins had improved 4bp QoQ to 3.07%.

Motilal Oswal in its analysis in May 2024 had reiterated a "BUY" rating on the stock, with a target price of ₹650 (1x FY26E ABV). "We broadly maintain our earnings estimates and expect CBK to deliver FY26 RoA/RoE of 1.1%/18.4%. We reiterate our BUY rating with a TP of INR650 (1x FY26E ABV)," the brokerage major said.