CENTRALBK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.6

🧾 Core Financials

Earnings Growth: Quarterly PAT rose from ₹1,034 Cr to ₹1,169 Cr—a strong 32.8% jump, signaling improving profitability.

Return Metrics: ROE of 11.1% is decent, but ROCE at 5.45% is relatively weak, suggesting limited efficiency in capital deployment.

EPS: ₹4.59 is modest, but aligns with the low stock price.

Debt Profile: Debt-to-equity of 11.6 is extremely high—typical for banks, but still a risk factor in volatile credit cycles.

Cash Flow: Not explicitly stated, but rising profits and stable operations imply improving cash generation.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 8.37 Slightly above industry average (7.91)

P/B Ratio ~0.91 Undervalued relative to book value

PEG Ratio 0.15 Deeply undervalued based on growth

Dividend Yield 0.53% Minimal income play

The PEG ratio and P/B suggest the stock is trading at a discount, especially given its recent earnings momentum.

🏦 Business Model & Competitive Advantage

Central Bank of India is a public sector bank with a wide national footprint and strong legacy. Its strengths include

Government backing and regulatory support

Broad retail and agricultural lending programs

Digital banking initiatives and partnerships (e.g., Kotak Mutual Fund distribution)

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However, it faces challenges in asset quality, operational efficiency, and competitive positioning against private banks.

📈 Technical & Sentiment Indicators

RSI: 65.8 – Approaching overbought territory.

MACD: 0.24 – Mild bullish momentum.

Volume Spike – Above weekly average, indicating increased interest.

DMA 50 & 200: Current price is above DMA 50 but below DMA 200—mixed signals.

💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹34–₹36, near DMA 50 and support levels

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Current Price ₹37.7: Slightly above ideal entry, but still undervalued on fundamentals.

🕰️ Long-Term Holding

Hold if already invested: Improving earnings and low valuation make it a potential turnaround story.

Cautious entry for new investors: Monitor asset quality and ROCE trends. Suitable for value investors with high risk tolerance.

Let me know if you’d like a peer comparison with other PSU banks or a forecast model for 2026.

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shareprice-target.com

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stockpricearchive.com

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www.etmoney.com

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