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    Jhunjhunwalas raise stake in this PSU stock that gave index-beating returns in 2022

    Synopsis

    The reviving credit growth, better margin prospects, lower FPI ownership, lower imminent risk of a rise in credit costs, and the large valuation discount makes public sector bank stocks a preferred bet for Credit Suisse over private banks.

    Jhunjhunwalas raise stake in this PSU stock that gave index-beating returns in 2022ETMarkets.com

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    Rekha Jhunjhunwala, the wife of late ace investor Rakesh Jhunjhunwala, has raised her stake in state-owned lender Canara Bank by 59 basis points sequentially during the quarter that ended December.

    Jhunjhunwala’s stake in the lender increased to 2.07% as of December 31, from 1.48% a quarter ago, BSE data showed.
    Between the March and June quarter, Jhunjhunwala held a 1.96% stake in the bank but reduced it to a 1.48% stake in the September quarter.

    The sharp rally in public sector banks in view of the bullish outlook may have prompted the ace investors to increase their holding.
    In 2022, shares of Canara Bank surged over 66%, outperforming benchmark Nifty50 by a wide margin, as the index has net gained 4% in the same period.

    Earlier this month, the stock tested a nearly 5-year high of Rs 341.70 on the NSE.

    Despite such a run-up, the stock is trading well below its 5-year average price-to-earnings (P/E) ratio. Canara Bank is trading 7 times on a 12-month trailing basis, against its 5-year average of 10.4 times.

    Analysts are bullish on the PSU banking pack as they expect credit growth to further pick up with the recovery in consumption and discretionary spending.

    Of the 10 analysts that track the bank, six of them have a “strong buy” rating for the stock, according to Trendlyne.

    The reviving credit growth, better margin prospects, lower FPI ownership, lower imminent risk of a rise in credit costs, and the large valuation discount makes public sector bank stocks a preferred bet for Credit Suisse over private banks.

    “PSU banks’ growth has picked up sharply over the past couple of quarters. While the pace of growth is unlikely to sustain, growth could remain healthy at 12-14% in the medium term,” the brokerage said in its recent report.

    (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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