Now Reading: Canara Bank: Equirus retains Long, target Rs 155
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Canara Bank: Equirus retains Long, target Rs 155
Equirus Securities has retained its 'Long' rating on Canara Bank with an unchanged target price of Rs 155. The bank reported in-line net interest income with flattish net interest margins at 2.52…
The Story in Brief
Equirus Securities has retained its 'Long' rating on Canara Bank with an unchanged target price of Rs 155. The bank reported in-line net interest income with flattish net interest margins at 2.52 per cent. Advances grew 5 per cent quarter-on-quarter, driven by retail and MSME segments. Slippages moderated to 58 bps, while GNPA and NNPA ratios improved to 1.6 per cent and 0.4 per cent respectively.
Management expects FY27 NIMs of 2.5-2.6 per cent and sees 20-30 bps cost of funds benefit on incremental deposits. Canara Bank has raised $775 million in FCNR(B) deposits and targets $2.5 billion. Equirus expects FY27 return on assets of about 1 per cent, but near-term margins may remain constrained. Sustained improvement in the liability franchise and NIM expansion are key catalysts.
The Indian Opinion
The bullish case for Canara Bank rests on its improving asset quality and retail-driven loan growth. But the narrative that NIMs will rebound sharply ignores guidance of flattish margins and the fact that the bank passes on cost-of-fund benefits to borrowers. Optimism over liability franchise improvement must be weighed against rising competition for deposits. Watch whether Canara Bank achieves its $2.5 billion FCNR(B) mobilisation target, that number will test if margin expansion is real.
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above.
