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Home >Markets >Stock Markets >Experts give 'buy' tag to this newly added stock of Rakesh Jhunjhunwala portfolio

Rakesh Jhunjhunwala portfolio: In April to June 2021 quarter, Rakesh Jhunjhunwala added three new stocks — Steel Authority of India Limited or SAIL, Indiabulls Housing Finance and Canara Bank — in his portfolio. Though, all these stocks were added in Rakesh Jhunjhunwala holdings in Q1 FY22, addition of Canara Bank shares in Big Bull's portfolio became public recently when the public sector bank shared its shareholding pattern with Indian exchanges. According to stock market experts, this new Rakesh Jhunjhunwala stock is expected to give upside move and may go up to 175 in immediate short term.

Canara Bank share price outlook

Highlighting the fundamentals that may favour sharp rise in Canara Bank share price; Anand Dama, Research Analyst at Emkay Global Securities said, "After the first round of capital raise in December 2020 ( 20bn at 109 per share), CBK (Canara Bank) raised 25bn this week via second tranche of QIP at a better price of 149.3 per share. We believe that the capital raise will mainly shore up its capital ratios."

Dama went on to add that Canara Bank had reduced headline NPAs (Non Performing Assets) in Q1 (down 43 bps qoq to 8.5 per cent). It has identified NPAs to the tune of 51.5bn (0.8 per cent of loans) to be transferred to NARCL. This will further bring down NPAs in Q2/Q3, which could be a near-term positive. It has also shored up the specific provision cover to 61 per cent, which otherwise has been an irritant.

"We believe that merger-related concerns are largely behind and the bank should report a gradual improvement in its RoA/RoE to 0.4 to 0.5 per cent/10 to 11 per cent by FY23E-24E, led by better growth and moderate LLP," Dama concluded.

Canara Bank share price target

Advising investors to buy this Rakesh Jhunjhunwala portfolio stock; Sumeet Bagadia, Executive Director at Choice Broking said, "One can buy Canara Bank shares at current market price for the immediate target of 165 to 175 maintaining stop loss at 140." He said that Canara Bank shares may go up to 210 after breaking this 175 hurdle.

Rakesh Jhunjhunwala holding in Canara Bank

According to the shareholding pattern of this new Rakesh Jhunjhunwwala holding company for the April to June 2021 period, Big Bull bought 2,88,50,000 company shares, which is around 1.59 per cent of the net company shares.

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