CENTRALBK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | CENTRALBK | Market Cap | 32,865 Cr. | Current Price | 36.3 ₹ | High / Low | 52.8 ₹ |
| Stock P/E | 7.03 | Book Value | 43.1 ₹ | Dividend Yield | 1.65 % | ROCE | 5.45 % |
| ROE | 11.1 % | Face Value | 10.0 ₹ | DMA 50 | 37.4 ₹ | DMA 200 | 39.4 ₹ |
| Chg in FII Hold | -0.03 % | Chg in DII Hold | -0.04 % | PAT Qtr | 1,263 Cr. | PAT Prev Qtr | 1,213 Cr. |
| RSI | 43.4 | MACD | -0.20 | Volume | 1,02,26,574 | Avg Vol 1Wk | 81,54,702 |
| Low price | 32.8 ₹ | High price | 52.8 ₹ | PEG Ratio | 0.13 | Debt to equity | 12.4 |
| 52w Index | 17.6 % | Qtr Profit Var | 31.7 % | EPS | 5.17 ₹ | Industry PE | 7.64 |
📊 Financials: Central Bank of India has shown steady profitability with PAT rising to 1,263 Cr from 1,213 Cr, reflecting a 31.7% quarterly profit variation. ROE at 11.1% is modest, while ROCE at 5.45% indicates limited efficiency. Debt-to-equity ratio of 12.4 is high, typical for banks, but manageable given systemic support. EPS of 5.17 ₹ provides earnings visibility, though profitability remains moderate compared to peers.
💹 Valuation: Current P/E of 7.03 is slightly below industry average (7.64), suggesting fair valuation. P/B ratio ~0.84 (Price 36.3 ₹ / Book Value 43.1 ₹) indicates undervaluation relative to book value. PEG ratio of 0.13 highlights attractive growth-adjusted valuation. Dividend yield of 1.65% adds moderate income support.
🏢 Business Model: As a public sector bank, Central Bank of India operates across retail, corporate, and priority sector lending. Its competitive advantage lies in government backing, wide branch network, and systemic importance. However, profitability and efficiency metrics remain weaker than leading peers.
📈 Entry Zone: Attractive accumulation zone between 34–36 ₹, near support levels and below DMA200 (39.4 ₹). RSI at 43.4 suggests neutral momentum, while MACD (-0.20) indicates mild bearishness. Long-term investors can accumulate gradually at lower levels.
🔒 Holding Guidance: Fundamentally stable with government support and undervaluation relative to book value. Suitable for long-term holding, though investors should monitor asset quality and profitability improvements.
Positive
- Quarterly PAT growth of 31.7% shows earnings momentum.
- P/B ratio of 0.84 indicates undervaluation relative to book value.
- PEG ratio of 0.13 highlights attractive growth-adjusted valuation.
- Dividend yield of 1.65% adds moderate income support.
Limitation
- ROCE (5.45%) and ROE (11.1%) are modest compared to peers.
- High debt-to-equity ratio (12.4) reflects leveraged operations.
- Institutional sentiment weak with FII (-0.03%) and DII (-0.04%) reductions.
Company Negative News
- No major recent negative news reported, but asset quality and profitability remain structural concerns for PSU banks.
Company Positive News
- Steady profit growth with quarterly PAT improvement.
- Government backing ensures systemic stability and credibility.
- Undervalued relative to book value, offering margin of safety.
Industry
- Banking sector benefits from rising credit demand and economic expansion.
- Industry P/E at 7.64 suggests moderate optimism.
- Public sector banks gaining traction with improved profitability and capital adequacy.
Conclusion
✅ Central Bank of India is undervalued relative to book value, with steady profit growth and government backing. However, efficiency metrics remain modest, and asset quality risks persist. Long-term investors may accumulate near 34–36 ₹ for margin of safety, while monitoring profitability improvements.
I can also prepare a peer comparison with other PSU banks like Bank of India, UCO Bank, and Indian Overseas Bank to highlight relative strengths and weaknesses. Would you like me to add that?