Analysts expect Canara Bank to post a softer quarter, projecting a broader decline in PSU bank profitability due to weaker treasury gains and narrowing net interest margins.
Shares of public-sector lender Canara Bank fell 1.7% on Tuesday amid expectations of a softer second quarter, as sector-wide pressures on net interest margins (NIMs) and weaker treasury gains are likely to weigh on profitability, according to multiple brokerage estimates. Canara Bank is scheduled to report Q2 earnings on October 29.
However, technical charts suggest a potential breakout is brewing for this PSU bank stock.
Analyst View
SEBI-registered analyst Mayank Singh Chandel said there appears to be a “quiet confidence” building around Canara Bank, citing the recent 0.11% increase in stake by Rakesh Jhunjhunwala and Associates during the September 2025 quarter.
While small, Chandel said such moves from experienced investors often signal growing conviction.
From a technical perspective, Chandel observed that Canara Bank has been in a strong uptrend since the post-Covid period, reaching an all-time high in June 2024 before falling from ₹128.9 to ₹78.6.
He noted that buyers quickly stepped in to form a V-shaped recovery, and the stock recently gave a breakout from a flag and pole pattern, taking it close to its previous record levels.
Chandel added that the stock is currently trading just below its all-time high. A decisive breakout above that level could extend the uptrend, while a short-term pullback would be “completely normal” after the recent rally.
Q2 Earnings Preview
Analysts at Motilal Oswal and Emkay Global have cautioned that most state-owned banks, including Canara Bank, could see a year-on-year decline in profit after tax (PAT) for the September quarter.
Motilal Oswal projects a 7.1% year-on-year decline in PSU banks’ profits, while Emkay expects Canara Bank and peers like Axis Bank, Federal Bank, and Union Bank to report a “softer quarter” due to weak margins and elevated credit costs.
Brokerages also expect continued margin compression in the third quarter (Q3) as the full impact of the Reserve Bank of India’s recent 100-basis-point rate cut flows through.
What Is The Retail Mood?
On Stocktwits, retail sentiment was ‘bearish’ amid ‘normal’ message volume.
Canara Bank’s stock has risen 25% so far in 2025.
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