Banking stocks have recently become popular among investors, as indicated by their strong rise in recent months. A majority of the stocks in this space set new record highs, while some reached new 52-week highs.
Recent gains in banking stocks are being attributed to an acceleration in credit growth, a decline in non-performing assets (NPAs), double-digit growth in net interest income, and rating upgrades from top global brokerage firms.
Following is a list of banking stocks priced under ₹50 that have gained 37-122 percent in a month.
Punjab and Sind Bank
Punjab and Sind Bank has risen sharply recently, hitting a new 52-week high on Tuesday. The stock was trading over 3 percent higher at ₹42.20 on Wednesday, continuing its winning streak for the 5th straight session.
The stock gained traction on the back of multiple positive cues, including its aim to reach a CASA ratio of 35 percent by March. The bank anticipates a net profit of roughly ₹1,100 crore for the current fiscal year as a result of the resolution of bad loans.
In the last one month, the stock delivered a massive return of over 122 percent, rising from ₹18.40 apiece to the current level, while the stock has delivered a staggering return of nearly 150 percent in the last three months.
For the September quarter, the public sector lender posted a 27.52 percent YoY jump in its standalone net profit to ₹278 crore as against a net profit of ₹218 crore during the same quarter of the previous fiscal.
Shares of UCO Bank were trading 9.47 percent higher at ₹31.80 per share at 11:24 am on Wednesday. The stock gained 20 percent on Tuesday to record a new one-year high of ₹29.10 apiece. In six trading sessions to Tuesday, the stock surged 42.40 percent, moving from ₹20.30 to ₹29.05.
UCO Bank has produced an astounding return of over 95 percent in a month and over 135 percent over the past three months.
The stock started moving higher after the Reserve Bank of India (RBI) gave approval to nine Russian banks to open special Vostro accounts with UCO Bank and IndusInd Bank to facilitate overseas trade in rupees.
For the September quarter, UCO Bank reported a more than two-fold jump in its standalone net profit to ₹504.52 crore, compared to a net profit of ₹205.39 crore in the corresponding quarter a year ago.
Domestic revenues of the bank during the second quarter stood at ₹4,794.76 crore, while international revenues stood at ₹170.08 crore.
The bank's interest income during Q2 FY23 rose to ₹4,184.89 crore from ₹3,719.79 crore. The net interest margin (NIM) of the bank during the quarter stood at 2.84 percent.
|Scrip Name||LTP (Rs) (as of December 13, 2022)||% Monthly Returns (as of December 13, 2022)|
|Punjab & Sind Bank||40.85||122|
|Central Bank Of India||39.60||72.93|
|Bank Of Maharashtra||32.65||39.53|
|South Indian Bank||19.55||37.67|
Central Bank of India
The share price of the Central Bank of India gained 17.33 percent in Tuesday's trading session to reach a new 52-week high of ₹40.02 apiece. In the last week alone, the stock rallied from ₹26.35 to ₹39.60, delivering a return of 50.28 percent. The stock gained 92.23 percent during the last three months, with the majority of gains coming in the last month at 72.93 percent.
During Tuesday's trade, the stock recorded a volume of 236 million shares, both on the NSE and BSE.
The stock was trading flat on Wednesday at ₹40.
The net profit of the public sector lender in the September quarter rose to ₹318 crore as against a net profit of ₹250 crore during the same quarter of the previous fiscal.
The net interest margin of the bank improved to 3.44 percent in Q2 FY23 from 2.97 percent in Q2 FY22.
In its latest report, domestic brokerage firm LKP Securities had given a "buy" call on the stock with a 12-month target price of ₹37 apiece. However, it only took a few days for the stock to reach the brokerage's target price.
"After incurring losses for six consecutive years (FY16–FY21), the Central Bank returned to profitability in FY22." "Moreover, the bank has been reporting consistent growth in net profit since the last six quarters," the brokerage said.
Bank of Maharashtra
Shares of the Bank of Maharashtra rose nearly 13.70 percent during Tuesday's trade to mark a new 52-week high of ₹33.6 apiece. In the nine trading sessions to Tuesday, the stock gained nearly 23.44 percent and in the last one month, it has rallied over 40 percent. The stock began to rise in early October, moving up from ₹17.80 to the current level, representing an over 80 percent return.
The stock was trading 7 percent higher at ₹34.95 per share on the BSE at 11:30 am on Wednesday.
The public sector lender has emerged as the top performer among public sector banks in terms of loan growth in percentage terms during the second quarter of 2022–2023, PTI reported.
In Q2 FY23, the bank posted a 103 percent year-on-year growth in its net profit to ₹535 crore, compared to a net profit of ₹264 crore in the year-ago period.
The bank's net interest income was up 25.84 percent YoY in Q2 FY23 to ₹1,887 crore, while the bank's NIM improved to 3.55 percent in Q2FY23 from 3.27 percent in Q2FY22.
South Indian Bank
South Indian Bank shareholders were ecstatic with its stock performance over the last one month, rallying from ₹14.20 apiece to the current level of ₹20, producing a return of 38 percent. Since September, the stock has risen gradually from ₹8.60 to the current market price, representing an increase of about 127 percent.
During Tuesday's intraday trading, the stock rose nearly 7 percent to a new 52-week high of ₹19.8 per share. The stock was trading 2.5 percent higher on Wednesday.
The bank reported a net profit of ₹223.10 crore for the quarter ended September 2022, as bad loan provisions were significantly reduced. The bank had posted a net loss of ₹187.06 crore in the same quarter a year ago.
On the asset quality side, the gross non-performing assets of the lender fell to 5.67 percent of gross advances in Q2 FY23 compared to 6.65 percent in the year-ago quarter. While the net NPAs of the bank came down to 2.51 percent during the quarter from 3.85 percent in Q2FY22.
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