Banking stock up 75% in a year after stake buy by Rakesh Jhunjhunwala. More upside left?
PremiumRakesh Jhunjhunwala portfolio stock has risen from around ₹155 to ₹270 apiece levels in near one year
Rakesh Jhunjhunwala portfolio: Beginning of a new quarter is not just an arrival of results season that retail stock investors await. In fact, some of them wait for the shareholding pattern of the stocks owned by ace investors as it helps them know the direction in which smart money has flown. Some retail investors scan ace investors' portfolio to find out value picks as well. For such investors, there is a piece of stock market news.
One of the Rakesh Jhunjhunwala portfolio stocks Canara Bank has delivered near 75 per cent return to its shareholders since 'Big Bull' acquired stake in this PSU bank during July to September 2021 quarter. Rakesh Jhunjhunwala's name had first appeared in the shareholding pattern of Canara Bank in Q2FY22 where he was found holding around 1.60 per cent stake in the PSU stock.
Canara Bank share price history
As per Canara Bank shareholding pattern for July to September 2021 quarter, Rakesh Jhunjhunwala was holding 28,850,000 Canara Bank shares, which was 1.59 per cent of total paid up capital of the PSU bank. As shareholding pattern don't give details of the deal, we are taking initial price of Canara Bank shares at the beginning of July 2021. In the beginning of July 2021, Canara Bank share price was at ₹155 apiece and today Canara Bank share price is oscillating around ₹270 apiece levels. This means, this Rakesh Jhunjhunwala portfolio stock has surged around ₹115 per share, logging near 75 per cent rise in around one year time. Or in other words, Canara Bank shares have risen around 75 per cent in near one year after stake acquisition by Rakesh Jhunjhunwala.
Rakesh Jhunjhunwala shareholding in Canara Bank
As mentioned above, Rakesh Jhunjhunwala was holding 1.59 per cent stake in the stock at the end of September 2021 quarter that he kept unchanged at the end of December 2021 quarter. But in January to March 2022 quarter, Rakesh Jhunjhunwala raised his stake in the state-owned bank to 1.96 per cent and remained steady during April to June 2022 quarter. However, in July to September 2022 quarter, Rakesh Jhunjhunwala's holding came down at 26,847,400 Canara Bank shares or 1.48 per cent of total paid up capital of the stake-owned bank.
Canara Bank share price outlook
Despite stellar rise in Canara Bank shares, some brokerages are still bullish on Canara Bank stock. They believe that bank's loan book would fatten at a CAGR of near 20 per cent and expecting it to go up to ₹330 apiece levels in long term.
Giving 'buy' tag to Canara Bank shares, LKP Securities said, "Factoring near term capital infusion, we expect the bank’s loan book to fatten cautiously at CAGR of ~20 per cent over FY22-24E, led by RAM and corporate book growth. In our opinion, the bank’s credit cost will normalise further by FY23E and estimate return ratio ROA/ROE of 1.2 per cent and 18.9 per cent in FY24E. We value the standalone entity with 0.6xFY24E BVPS ( ₹538) and arrive at a target price of ₹323. We recommend BUY with a potential upside of 19 per cent."
Giving 'buy' tag to this Rakesh Jhunjhunwala portfolio stock, Emkay Global has given long term target of ₹330 per share.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
