CANBK - Investment Analysis

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

📊 Investment Rating: 4.2

Canara Bank (CANBK) presents a compelling case for long-term investment, especially for value-oriented investors seeking exposure to the public sector banking space. Here's a detailed breakdown

✅ Strengths for Long-Term Investment

Attractive Valuation

P/E: 5.40 vs Industry PE of 7.49 — undervalued

PEG Ratio: 0.13 — extremely favorable, suggests strong growth at a low price

Price-to-Book: ~0.95 — trading below book value

Strong Profitability

ROE: 17.8% — excellent return on equity

EPS: ₹18.4 — solid earnings base

PAT Qtr: ₹5,007 Cr — consistent performance

Dividend Yield: 3.63% — attractive for income investors

Momentum & Trend

52-week Index: +77.4% — strong price appreciation

Trading near 50 DMA (₹110) and above 200 DMA (₹103) — bullish undertone

⚠️ Risks & Concerns

Low ROCE: 6.79% — indicates modest capital efficiency

High Leverage

Debt-to-equity: 14.7 — typical for banks, but worth monitoring

Technical Weakness

RSI: 45.7 — neutral to slightly bearish

MACD: -0.30 — bearish crossover

DII Holding Decline: -0.44% — slight dip in domestic investor sentiment

📈 Ideal Entry Price Zone

To maximize upside and reduce risk, consider accumulating in the ₹100–₹108 range

This zone is near the 200 DMA and offers a margin of safety

RSI and MACD suggest weakness — wait for stabilization or reversal signals

🧭 Exit Strategy / Holding Period

If you're already holding the stock

Holding Period: 3–5 years to benefit from sector tailwinds and re-rating potential

Exit Strategy

Partial Exit near ₹115–₹119 (52-week high) if valuation remains compressed

Hold if ROE stays above 15% and PEG remains below 1.0

Monitor quarterly PAT and EPS — any stagnation or asset quality concerns may warrant trimming

Would you like a peer comparison with other PSU banks like Bank of Baroda or PNB to benchmark Canara Bank’s performance?

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