The fourth quarter of financial year FY22 has taken a centre stage with major companies lining up to announce their financial performance for the respective period. While the Q4 of FY22 was bittersweet and filled with steep volatility shocks due to geopolitical tension that led to soaring commodity and oil prices. However, in the same quarter, the big bull of Dalal Street, Rakesh Jhunjhunwala has also been busy grabbing the opportunity of a volatile equity market. The investor has increased his stake in a Bangalore-based nationalised bank.
This would be Canara Bank which is the third-largest nationalised bank in India under the ownership of the Indian government.
Canara Bank is one of the recent stocks that are added to Jhunjhunwala’s already booming portfolio. The investor found love for the bank in August last year and since then he has only increased his stake in the lender showcasing its growth potential ahead.
As of March 2022, Jhunjhunwala increased his shareholding in Canara Bank to 35,597,400 equity shares or 1.96%. In the previous quarter (October to December 2021), Jhunjhunwala’s holding in Canara stood at 29,097,400 equity shares or 1.6%.
Jhunjhunwala picked Canara stakes in August 2021 with 28,850,000 equity shares or 1.59%. He increased his holding further to 29,097,400 equity shares or 1.6% in September 2021 quarter but kept it unchanged till Q3 of FY22.
With that, Jhunjhunwala’s shareholding in Canara Bank has risen by 0.36% on a quarter-on-quarter basis.
On Friday, Canara Bank shares finished at ₹248.30 apiece up by 0.63% on BSE. The shares were near the day’s high of ₹249.80 apiece. At the current stock level, the Bank’s market valuation is more than ₹45,000 crore.
Canara Bank shares have made a strong rally in a year. Taking into consideration Friday’s closing price on BSE, Canara Bank shares have advanced by 69.70% as the shares stood at ₹147.2 apiece on April 8 of last year.
The shares have touched a new 52-week high of ₹272.80 apiece on BSE. Taking into account the new record high, Canara Bank shares have skyrocketed by more than 85% in a year.
The bank will be in focus due to its Q4 earnings which will be announced anytime between April-May this year.
In December 2021 quarter, Canara Bank reported a strong performance with profitability and interest income registering robust growth due to a decline in provisions.
In Q3FY22, Canara Bank’s standalone net profit more than doubled to ₹1502.12 crore from ₹696.06 crore in the same quarter last year. Net interest income (NII) jumped to ₹6,944.98 crore in Q3FY22 versus ₹6,086.48 crore in Q3FY21. Meanwhile, the bank’s provisions nearly halved to ₹2244.84 crore against ₹4210.28 crore in Q3 last year. However, gross non-performing assets (GNPA) increased to 7.8% in Q3FY22 against 7.46% in Q3FY21, but on a quarter-on-quarter basis, the asset quality improved as GNPA was at 8.42% in Q2FY22.
Overall, the banking sector outlook is healthy even in Q4.
Vinod Nair, Head of Research at Geojit Financial Services said, “The focus has shifted to the Q4 earnings season, which will start next week, initiated by the IT & Banking sector. Outlook for the banking sector is robust due to rapid bounce in credit growth & improvement in balance sheet while preview for IT is mixed as Q4 is seasonally weak.”
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