This PSU bank stock delivers 16% return in just 7 sessions, trades at 5-month high. Are you holding?

Canara Bank share price in focus today: Canara Bank share price snapped its six-day winning streak on Thursday, May 15, with a mild drop of 0.48% to ₹105.16 apiece. Over the last seven trading sessions (including today), the stock delivered an impressive 16% gain, with most of the rally coming after the lender’s March quarter results beat estimates.

The strong numbers not only boosted demand for the stock on Dalal Street but also prompted analysts to revise their earnings multiples higher. The recent rally pushed Canara Bank’s share price past the ₹105 mark for the first time since mid-December 2024 to reach a 5-month high of ₹106.57. 

For context, the stock experienced heavy selling between May 2024 and February 2025, closing each of those months in the red and losing 39% of its value. Following this sustained decline, the stock regained strength in March and April, closing both months with gains of 10%. The rally extended into the current month as well, with the stock adding another 8% so far.

Founded in 1906, Canara Bank is the third-largest PSU bank in India. Over the years, it has strengthened its market position to emerge as a major financial conglomerate, with as many as thirteen subsidiaries and sponsored institutions in India and abroad.

Analysts see further rally in Canara Bank share price

In its latest report, domestic brokerage firm Axis Securities retained its 'Buy' rating on Canara Bank following its March quarter results, with a target price of ₹117 apiece. The brokerage believes the bank is well-positioned to deliver a return on assets (RoA) of 0.9–1% and a return on equity (RoE) of 15–16% over the medium term. 

This is supported by its ability to maintain steady margins despite near-term headwinds, potentially better treasury gains in FY26E, and stable asset quality trends that help keep credit costs under control.

The brokerage expects the bank to report advances, net interest income (NII), and earnings growth of 11%, 11%, and 6% CAGR, respectively, over FY25–27E. Likewise, Emkay Global has also maintained its 'Buy' call on the stock, with a target price of ₹120 apiece.

It has raised its earnings estimates for FY26–28E by approximately 5–7%, factoring in improved treasury gains, NPA recoveries, and lower loan loss provisions (LLP). As a result, it projects the bank to deliver an RoA of 0.9–1.1% over FY26–28E.

The state-owned lender reported a 30% year-on-year (YoY) jump in net profit at ₹5,003 crore on May 8, primarily driven by treasury gains, recovery from written-off loans, and provision reversals on security receipts (SR) investments.

Credit growth exceeded expectations at 12.6% YoY and 2.5% quarter-on-quarter (QoQ), while deposit growth remained strong at 11% YoY and 6.4% QoQ. This, coupled with higher loan yields, helped keep net interest margins (NIMs) nearly flat at 2.7%, following a steady decline over the previous two quarters.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.