Canara Bank’s stock experienced a significant surge of 5% in trading activity following the implementation of a long-anticipated 1:5 stock split approved by the bank’s board earlier this year. The move aimed to enhance liquidity and accessibility of Canara Bank’s shares to retail investors. The stock split, effective immediately, saw Canara Bank shares reach an intraday high of ₹118.90 on the National Stock Exchange (NSE), indicating a notable increase from the adjusted close price of ₹113.30 per share on the preceding day.
Market experts are optimistic about the implications of the stock split on Canara Bank’s future performance, expecting increased trade volume and investor interest due to the bank’s attractive valuations. Post-split, Canara Bank shares are trading at a promising PE multiple of approximately 1.47, reflecting efficient management of funding costs by the PSU bank. Analysts foresee further upward momentum in Canara Bank shares, with Saurabh Jain of SMC Global Securities highlighting the bank’s advantageous cost of funding amidst current interest rate trends.
Canara Bank’s recent financial performance adds to the positive sentiment surrounding the stock, with an 18% growth in standalone net profit reported for the quarter ended March 2024 compared to the same period last year. Additionally, the company’s Board recommended a substantial dividend of ₹16.10 per share for the financial year 2023-24. Government of India holds a majority 63% stake in Canara Bank, with the remaining 37% held by the public. Over the past year, Canara Bank stock has delivered impressive returns to investors, with technical charts indicating a favorable position for potential further growth.
PRO and CONS of canara bank;
PROS
- Company has delivered good profit growth of 90.8% CAGR over last 5 years
- Company has been maintaining a healthy dividend payout of 19.2%
CONS
- Company has low interest coverage ratio.
- Contingent liabilities of Rs.3,15,633 Cr.
- Earnings include an other income of Rs.28,646 Cr.
- Promoter holding has decreased over last 3 years: -6.40%
About;
- Market Cap- ₹ 1,03,179 Cr.
- Current Price- ₹ 114
- High / Low- ₹ 127 / 58.3
- Stock – P/E6.81
- Book Value- ₹ 86.0
- Dividend Yield- 2.81 %
- ROCE- 7.00 %
- ROE- 19.6 %
- Face Value- ₹ 2.00
Originally posted 2024-05-16 06:05:00.
