Hold Canara Bank - Emkay

Reco: HOLD
CMP: Rs 464
Target Price: Rs 500

Impressive quarter; but hit by one-offs

- CBK's NII at Rs19.2bn / Operating profit at Rs15.8bn well on track. However, higher investment dep + PV losses dragged bottomline. Net profit at Rs8.7bn was down 21% yoy.

- Sharp increase in the doubtful assets categories in NPLs from 36% of total to 46%. Lower LLP (30bps) and one-offs in restructured book was a disappointment.

- Loan growth at 16% yoy aided by growth on corporate front. QoQ fall in LDR, lower CASA and declining share of high yielding assets dragged NIM. NIM at 2.54% was -12bps qoq.

Raised our earning estimates marginally. Adequate capital for growth with improvement in cash recoveries and lower slippages remain key +ves. Maintain HOLD with TP of Rs500.

Source : Equity Bulls

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