Canara Bank share price nears 14-year high as rally extends to sixth straight session, up over 62% from March lows

Sustaining their bull run for the sixth straight session, shares of Canara Bank, a state-owned lender, jumped another 1.3% in Tuesday's intraday trade, October 07, to the new 1-year high of ₹128.40 apiece, bringing it just steps away from hitting a 14-year high of ₹129.85 apiece.

The shares have been on a sustained bull run in recent months, gaining 62.6% from the March lows and emerging as the best performer in the recent rally among public sector bank stocks.

The recent run-up in Canara Bank’s share price has also pushed its year-to-date gains to 27%. If the current momentum is sustained through the rest of the year, it will mark the PSU bank stock’s fifth consecutive year of positive returns.

Ever since 2021, the stock has delivered double-digit returns, with 2022 emerging as the best-performing year, achieving a 66% rally, followed by a 55% gain in 2021.

The rally is supported by several positive developments, including reports of a possible increase in the FPI limit for PSU banks and hopes of a pickup in credit demand, led by the GST rate cut boost.

Meanwhile, the rally has also found support from the upcoming IPO of its subsidiary, Canara Robeco Asset Management Company, which has recently set the issue price between ₹253 and ₹266 per share.

Canara Robeco, a joint venture between Canara Bank and ORIX Corporation Europe, a unit of Japan's ORIX Corporation, will open its initial public offering to retail investors on October 9, with anchor investors invited to place their bids on October 8.

The firm, which manages more than ₹1 trillion in assets, will not issue any fresh shares in the IPO, with the two existing shareholders offloading a combined 49.8 million shares.

Canara Robeco competes with major listed asset management companies such as HDFC Asset Management Company, Nippon Life India Asset Management, and UTI Asset Management Company.

Canara Bank Q2FY26 earnings preview

For Q2FY26, domestic brokerage firm Motilal Oswal expects Canara Bank to report a net interest income of ₹89,705 million for the September quarter, reflecting a 3.7% YoY decline and a 0.4% drop on a sequential basis.

The brokerage anticipates the bank’s operating profit to improve 1.2% YoY to ₹77,455 million, though it may decline 9.4% QoQ. On the bottom line, net profit is expected at ₹42,553 million, marking a 6% YoY increase but a 10.5% sequential drop.

Margins are likely to see some moderation, while asset quality is expected to improve, according to Motilal Oswal. Advances and deposit growth will remain key monitorables, and the brokerage maintains a 'Buy' rating on the stock with a target price of ₹140 per share.

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