Check Before You Invest : Canara Bank

Q: Which industry/sub-sector does Canara Bank belong to?

Canara Bank belongs to the BFSI sector, operating specifically within the Bank - Public segment.

Q: Is Canara Bank a good quality company?

Canara Bank is a average quality company, based on a somewhat consistent multi-year financial track record. This assessment is based on the bank’s performance on Total Income growth, Pre-Provision Operating Profit, RoA, RoE, CAR, and Asset Quality, along with how these metrics compare with its long-term averages.

Q: Is Canara Bank undervalued or overvalued?

Canara Bank appears Overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 6.5, Historic Median: 6.33. Price to Book, Current: 1.04, Historic Median: 1.02. Price to Sales, Current: 0.92, Historic Median: 0.81. EV to EBITDA, Current: 3.53, Historic Median: 2.95

Q: Is Canara Bank a good buy now?

Canara Bank is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Q: Total Income growth of Canara Bank?

Canara Bank Total Income growth is 9.7% for FY-2025, which is below its 5-year CAGR of 19.92%, indicating slower growth.

Q: Return on Assets of Canara Bank?

Canara Bank Return on Asset is 1.1%, which is above its 5-year historical median of 0.8%, indicating improved earnings on assets. Efficiency & Key Metrics. NIM (%), Current: 2.31, Historic Median: 2.31. PPOP (%), Current: 14.18, Historic Median: 14.41. RoA (%), Current: 1.1, Historic Median: 0.8

Q: Return on Equity (ROE) of Canara Bank?

Canara Bank Return on Equity is 19.1% for FY-2025, which is above its 5-year historical median of 16.4%, indicating the business is making better use of its shareholders capital.

Q: Pre-provisioning operating profit margin of Canara Bank?

Canara Bank Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 14.18% for FY-2025, which is in line with its 5-year median(14.41%), indicating stable margins.

Q: Net Interest Margin of Canara Bank?

Canara Bank Net Interest Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 2.31% for FY-2025, which is in line with its 5-year median( 2.31%), indicating stable margins.

Q: Does its ROIC exceed its WACC?

Canara Bank return on invested capital (ROIC) is 43.36% for FY-2025, is higher than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Check Before You Invest : Canara Bank

BSE: 532483 NSE: CANBK ISIN: INE476A01022

| Sector: BFSI | Industry: Bank - Public

Snapshot

Q.1 Which industry/sub-sector does Canara Bank belong to?

Canara Bank belongs to the BFSI sector, operating specifically within the Bank - Public segment.

Q.2 Is Canara Bank a good quality company?

Canara Bank is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on the bank’s performance on Total Income growth, Pre-Provision Operating Profit, RoA, RoE, CAR, and Asset Quality, along with how these metrics compare with its long-term averages.

Q.3 Is Canara Bank undervalued or overvalued?

Canara Bank appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	6.5	6.33
Price to Book	1.04	1.02
Price to Sales	0.92	0.81
EV to EBITDA	3.53	2.95

Q.4 Is Canara Bank a good buy now?

Canara Bank is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Total Income growth, NIM, PPOP, RoA and RoE compared to its last 5-year median.
How efficiently has it grown and managed operations?
By checking its Total Asset growth and Cost-to-Income ratio.
How strong is its Capital position and Asset Quality?
By checking its Capital Adequacy Ratio (CAR), GNPA and NNPA.

A: What are the trends in income and profitability?

Q.1 Total Income growth of Canara Bank?

Canara Bank Total Income growth is 9.7% for FY-2025, which is below its 5-year CAGR of 19.92%, indicating slower growth.

Q.2 Return on Assets of Canara Bank?

Canara Bank Return on Asset is 1.1%, which is above its 5-year historical median of 0.8%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NIM (%)	2.31	2.31
PPOP (%)	14.18	14.41
RoA (%)	1.1	0.8

Q.3 Return on Equity (ROE) of Canara Bank?

Canara Bank Return on Equity is 19.1% for FY-2025, which is above its 5-year historical median of 16.4%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Canara Bank?

Canara Bank Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 14.18% for FY-2025, which is in line with its 5-year median(14.41%), indicating stable margins.

Q.5 Net Interest Margin of Canara Bank?

Canara Bank Net Interest Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 2.31% for FY-2025, which is in line with its 5-year median( 2.31%), indicating stable margins.

Q.6 Does its ROIC exceed its WACC?

Canara Bank return on invested capital (ROIC) is 43.36% for FY-2025, is higher than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

B: Does the bank grow efficiently and manage its operating costs?

Q.7 Total Asset growth of Canara Bank?

Canara Bank Total Asset growth is 12.75% for FY-2025, which is below its 5-year CAGR of 18.48%, indicating slower growth.

Q.8 Cost to Income ratio of Canara Bank?

Canara Bank Cost to Income ratio which represents the cost incurred for every Rs.100 earned is 54.6% for FY-2025, is in line with its historical 5-year median of 54.6%, indicating stable cost management.

C: How strong is the bank’s capital position and asset quality?

Q.9 Capital Adequacy ratio of Canara Bank?

Canara Bank Capital Adequacy ratio (CAR) is 16.33% for FY-2025, which is above the regulatory requirement of 12%, indicating strong capital position.

Q.10 Asset Quality of Canara Bank?

Canara Bank Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 2.94% for FY-2025, which is below its 5-year median 5.35%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.70% which is below its 5-year median( 1.73%), indicating improving asset quality.

Ownership & governance

D: Promoter shareholding and pledge status of Canara Bank?

Q.1 Promoter shareholding and pledge status of Canara Bank?

Promoters hold 62.93% of the Canara Bank, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Canara Bank performance compare with that of its Peers?

Q.1 AUM Growth of Canara Bank vs Industry Peers?

Canara Bank AUM CAGR is 18.48%, compared to the 5-year industry median CAGR of 17.68%, indicating stable growth and maintaining its market share.

Q.2 Profit metrics (NIM, PPOP, RoA) of Canara Bank vs industry peers

Canara Bank profit metrics are in line with the industry median level of 5.79%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NIM (%)	2.31	2.64
PPOP (%)	14.18	13.94
RoA (%)	1.1	0.8

Q.3 Operating efficiency of Canara Bank vs industry peers?

Canara Bank Cost to Income (54.55) is above the industry median of (49.7); while the current ROE (16.4) are above than the 5-year average Industry ROE (14.15). This shows that the business is positioned in the top quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NIM (%)	2.31	2.64
PPOP (%)	14.18	13.94
RoA (%)	1.1	0.8
Cost to Income (%)	54.6	49.7
ROE (%)	19.1	14.15

Valuation & price assessment

Q.1 Stock return of Canara Bank over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 13.6% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	13.6%	33.1%	28.5%	19.6%

Q.2 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	6.5	6.33	10.61
Price to Book	1.04	1.02	1.12
Price to Sales	0.92	0.81	1.15
EV to EBITDA	3.53	2.95	5.06

Q.3 Valuation ratios of Canara Bank vs historical and industry averages?

The current Price-to-Book (P/B) ratio of 1.04 is lower than its historical median of 1.02, indicating that the stock is trading below its historical average valuation.

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Check Before You Invest : Canara Bank

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

Check more companies

Check trending companies

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