Canara Bank share price target: The outcomes of the March quarter for Canara Bank were expected by the market. The PSU lender Canara Bank’s gradual efforts to rejig exposure of older low yielding corporate book by either renewing them at current yields or by replacing them with other products that offer more favourable returns resulted in a marginal expansion of its Q4 net interest margin (NIM) despite an increase in the cost of funds. Analysts added that moving forward, everyone would be watching the provision reversal.
Canara Bank share price: Canara Bank posted strong but in-line earnings, according to Motilal Oswal. This was mostly offset by higher-than-expected provisions. The bank’s other income was strongest. Margin expanded by 4 basis points on a QoQ basis due to robust NII growth.
Nonetheless, the management projects NIMs to be between 2.9% and 3% in FY25. The retail sector led the increase in loans. Because to CASA deposits, deposit growth has accelerated, and the future looks promising. While overall asset quality ratios improved, there was a sequential increase in new slippages. We expect Canara Bank to generate FY26 RoA/RoE of 1.1%/18.4%, and we largely retain our profit expectations,” stated Motilal Oswal Securities.
The firm has maintained its rating of ‘Buy’ on the company, with a Rs 650 target price. The stock was up 0.32 percent at Rs 559.90 on the BSE on Thursday.
Employee costs should stabilize from here on out, according to JM Financial‘s management. It views the cost-to-income ratio as limited to 47%.
“PCR was at a robust 71%, and asset quality measures kept getting better. We anticipate Canara Bank to continue rerating in the future due to the bank’s constant maintenance of stable NIMs, continuous lowering of loan costs, and sustained RoA of 1% over several quarters. By FY26E, we factor in a return on assets (ROA/ROE) of 1.02%/16.7%. It stated, “We maintain BUY with a revised target price of Rs 600.”
While NIM was essentially flat, Kotak Institutional Equities said that loan growth was less than industry growth and somewhat muted at 11% YoY. According to it, bad loan recoveries are trending downward even as asset quality is satisfactory.
Canara Bank values this brokerage at Rs 530, which is reasonable.
“We have estimated the bank’s value at 1x March 2026E adjusted book, assuming 15–16 percent long-term return on equity.” Canara Bank’s return ratios have improved recently as a result of substantial recoveries from written-off accounts and reducing credit costs. We anticipate that going into FY2025E, the pressure on NIM will remain high and that recovery from written-off accounts will probably fall. The bank stated that although it may be able to counteract most of the RoA drag with additional credit cost reductions, the trajectory of provision reversals will need to be closely watched.
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