CANBK - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.9

Canara Bank (CANBK) shows strength as a large-cap PSU banking play, combining undervaluation signals with decent return metrics. Let’s bank on the breakdown

🏦 Core Financials Overview

EPS: ₹18.4 — strong earnings visibility for a ₹110 stock.

ROE: 17.8% | ROCE: 6.79% — ROE is solid, while ROCE reflects typical asset-heavy PSU structure.

PAT Qtr: ₹5,007 Cr vs ₹5,070 Cr — flat profit, but annual trajectory remains upward.

Debt-to-Equity: 14.7 — expectedly high for a bank, not a concern in this sector.

Dividend Yield: 3.63% — attractive passive income potential.

📊 Valuation Metrics

P/E: 5.4 vs Industry PE: 7.49 — highly undervalued relative to peers.

P/B: ~0.95 (₹110 ÷ ₹116) — priced slightly below book value, enhancing value appeal.

PEG: 0.13 — very low, indicating high earnings growth at a bargain multiple.

Intrinsic Value Estimate: ₹120–₹135 — current price below intrinsic range, offering accumulation opportunity.

💼 Business Model & Strategic Edge

Segment: Public sector banking—retail, corporate, MSME, treasury.

Strengths

Large deposit base and PAN-India branch network.

Government backing provides stability and regulatory access.

Improving asset quality and NIM profile.

Concerns

Cyclical stress from NPAs and provisioning.

Competition from private sector and fintech disruptors.

Slight dip in DII holding suggests mild caution.

📉 Technical Snapshot

RSI: 45.7 — near neutral, room for upward movement if support holds.

MACD: –0.30 — minor bearish momentum; consolidation phase likely.

Volume significantly below 1-week average — signals accumulation pause or indecision.

🎯 Suggested Entry Zone

₹100 – ₹108: Value zone near DMA200 with limited downside.

Lower end near ₹78.6 (52-week low) offers deep-value entry for contrarians.

🧭 Long-Term Holding Guidance

Ideal for income-seeking or value investors holding a 3–5 year horizon, banking on

Continued economic expansion and credit growth.

PSU reforms, tech upgrades, and operational efficiencies.

Strong dividend yield and re-rating potential.

Would you like a comparison with SBI or Bank of Baroda to map where CANBK stands on PSU banking performance, valuation, and future runway? I’ll line it up. 🏛️📈💡

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