Canara Bank's Q1 financials show positive performance, with improving NPA ratio and high PAT.

Canara Bank, one of the leading public banks in India, has recently declared its financial results for the quarter ended June 2024. The stock call for the bank by MarketsMOJO is 'Hold'.

According to the financials, Canara Bank has shown positive performance in the quarter, with a score of 7 out of 18, which is an improvement from the previous quarter. The bank has also seen a decrease in its gross non-performing assets (NPA) ratio, which is currently at 4.14%, and has been falling consistently for the past five quarters. This indicates that the proportion of stressed loans given by the bank is decreasing.

The bank's profit after tax (PAT) for the quarter is at its highest in the last five quarters, standing at Rs 3,905.28 crore, and has been growing consistently. This shows a positive trend in the near term for the bank's profitability. Similarly, the net NPA ratio has also decreased to 1.24%, indicating a decrease in stressed loans.

Canara Bank has also shown a positive trend in its interest earned, with a growth of 20.24% year on year, at Rs 85,547.53 crore for the nine-month period. The bank has also generated a high operating cash flow of Rs 14,254.12 crore in the last three years, indicating a strong cash flow from its business operations. Additionally, the bank's short-term liquidity has improved, with its cash and cash equivalents at its highest in the last six half-yearly periods, at Rs 71,068.18 crore.

However, there are some areas that need improvement for Canara Bank. The profit before tax (PBT) for the quarter has fallen by -91.9% compared to the average PBT of the previous four quarters. This is a cause for concern in the near term. The bank's non-operating income is also high, at 99.72% of its PBT, which may not be a sustainable business model. The bank's income from non-business activities has also increased significantly, which may not be sustainable in the long run.

Overall, Canara Bank has shown positive financial performance in the quarter ended June 2024, with improvements in key areas such as NPA ratio, PAT, and operating cash flow. However, there are some concerns that need to be addressed for sustained growth in the future. Investors are advised to hold their position in the stock, as recommended by MarketsMOJO.