ITC falls in hotel business division, Canara Bank 75% profit growth

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ITC’s stock fell by about 3% on Monday, July 24, 2023, after the company announced that it would be de merging its hotel business. The demerger is expected to be completed by the end of the year.

ITC falls on hotel business demerger,

There are a few reasons why ITC’s stock fell after the announcement of the demerger. First, some investors may have been concerned about the potential impact of the demerger on the company’s overall financial performance. Second, the demerger could lead to a dilution of shareholder value, as the new hotel company would be spun off from ITC and would have its own stock.

However, other investors may see the demerger as a positive development. The hotel business is a relatively small part of ITC’s overall business, and the demerger could allow the company to focus more on its core businesses, such as cigarettes and consumer goods. Additionally, the demerger could create a more valuable asset for ITC shareholders, as the hotel business is expected to grow in the coming years.

Only time will tell how the demerger will impact ITC’s stock price. However, the initial reaction from investors suggests that the demerger is not being universally welcomed.

Canara Bank reports 75% y-o-y profit growth

Canara Bank reported a 75% year-on-year (YoY) profit growth for the quarter ended June 2023. The bank’s net profit stood at Rs 3,535 crore for the quarter, up from Rs 2,022 crore in the same period last year.

The profit growth was driven by a number of factors, including:

Growth in net interest income (NII), which rose 28% YoY to Rs 8,666 crore.
Decline in the bank’s gross non-performing assets (NPAs), which fell to 5.15% of gross advances at the end of June 2023, from 6.98% a year ago.

Reduction in provisions and contingencies, which fell 22% YoY to Rs 1,500 crore.

The bank’s asset quality continued to improve in the quarter, with the gross NPA ratio declining by 183 bps YoY. The net NPA ratio also declined by 90 bps YoY to 1.96%.

Canara Bank’s performance in the quarter was in line with the overall trend in the banking sector. The Indian banking sector reported strong profit growth in the first quarter of 2023, driven by a number of factors, including:

Growth in NII, which was supported by rising interest rates.

Decline in NPAs, which was driven by the economic recovery.

Reduction in provisions and contingencies.

The strong profit growth in the banking sector is a positive sign for the Indian economy. It suggests that the banks are well-capitalized and able to lend to businesses and consumers. This will help to support the economic recovery.

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