InvestorQ : Why has Canara Bank seen such a sharp rally in last few months?
Dia Deshpande made post

Why has Canara Bank seen such a sharp rally in last few months?

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swati Bakhda answered.
4 weeks ago
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The stock of Canara Bank more than doubled since late 2021 but the 2 year returns are a lot more interesting. Over the last 2 years Canara Bank is up nearly 4-fold from Rs84 to nearing Rs300 per share. Here is a quick price capture.

Month

High Price

Close Price

Oct-20

95.00

86.20

Nov-20

105.60

103.75

Dec-20

146.40

128.95

Jan-21

147.40

132.00

Feb-21

174.40

157.00

Mar-21

172.40

152.25

Apr-21

157.25

138.85

May-21

163.65

160.75

Jun-21

165.65

151.85

Jul-21

157.00

153.25

Aug-21

162.45

159.10

Sep-21

177.40

173.00

Oct-21

218.60

214.50

Nov-21

247.60

199.05

Dec-21

223.95

199.90

Jan-22

254.40

253.10

Feb-22

272.80

219.65

Mar-22

232.20

227.60

Apr-22

252.50

229.65

May-22

235.80

204.95

Jun-22

215.95

181.25

Jul-22

234.45

222.00

Aug-22

244.50

241.10

Sep-22

257.55

228.70

Oct-22

293.70

290.25

Nov-22

297.35

291.90

There are obviously a number of fundamental that investors and brokers are betting on the stock of Canara Bank. Here are a few justifiers.

a) PSU Bank index has been among the best performers on the NSE. Within the PSU banking space, Canara Bank is a preferred bet with still some value left for the investors on the table.

b) There is rising interest in mid-sized banks. Banks like Canara, especially after the amalgamation, managed to really ease the stress of bad assets and sharply reduced provisioning. This has been a force multiplier.

c) The net interest margin (NIM) spreads of Canara Bank are still much lower than the private sector counterparts, at around the 2.85% mark. However, this is improving and the trend is positive and that is what matters.

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