CENTRALBK - Investment Analysis

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

Investment Rating: 3.6

🏦 Fundamental Analysis

Central Bank of India presents a mixed picture — attractive valuation but modest efficiency. Here's a breakdown

Metric Value Implication

Market Cap ₹33,391 Cr Large PSU bank; systemic relevance

Stock P/E 7.92 Slightly above industry average; still undervalued

PEG Ratio 0.14 Very attractive; suggests strong earnings growth vs. valuation

ROE / ROCE 11.4% / 5.48% ROE is decent; ROCE is weak — capital efficiency is low

Dividend Yield 0.54% Low; not ideal for income-focused investors

Debt-to-Equity 11.8 Typical for banks; not alarming in this context

EPS ₹4.81 Reasonable for current price

Qtr Profit Var +30.0% Strong earnings momentum

FII/DII Holding Change -0.30% / -0.81% Slight institutional exit; sentiment cautious

📉 Technical Analysis

Current Price: ₹36.9

DMA 50 / DMA 200: ₹38.5 / ₹44.4 → Trading below both; bearish trend

RSI: 34.0 → Near oversold zone; potential for short-term bounce

MACD: -0.46 → Mild bearish momentum

Volume: Stable; no major divergence from average

💰 Valuation & Entry Zone

Given the low PEG ratio and improving profitability, this stock is a fair candidate for long-term investment, especially for value investors.

Ideal Entry Zone: ₹33–₹36

This range aligns with recent support and offers a good margin of safety

📈 Long-Term Investment Outlook

Pros

Undervalued (low P/E and PEG)

Improving profitability (PAT growth +30%)

Reasonable ROE for a PSU bank

Cons

Weak ROCE

Low dividend yield

Institutional investors trimming positions

Technicals still bearish

If the bank continues to improve asset quality and maintain earnings momentum, it could offer steady capital appreciation over 2–3 years.

🏁 Exit Strategy / Holding Period

If you already hold this stock

Short-Term: Hold; RSI suggests bottoming zone

Medium-Term: Reassess near ₹45–₹50; partial profit booking possible

Long-Term: Hold for 2–3 years if PEG remains <0.5 and ROE improves >12%

Exit fully if price crosses ₹60 without fundamental improvement, or if ROCE stagnates below 6% for multiple quarters.

Would you like a comparison with other PSU banks like Bank of India or UCO Bank to see how Central Bank stacks up?

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