Canara Bank shares: Moody's weighs earnings momentum against valuation drop
Moody's reviews Canara Bank's share slide since early 2026, its margin recovery, retail lending growth and the upcoming ECL transition from FY28.
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what happened
Moody's notes that Canara Bank's shares have risen about 22.4% since December 2024, while the Nifty gained roughly 3% over the same period. After a 52-week high of ₹162.9 in late February 2026, the stock has fallen about 32.5%, and its price-to-book ratio has dropped from 1.23x to 0.87x. The research firm links this mainly to weaker net interest income growth in FY25 and FY26.
In the first half of FY27, net interest income rose 16.9% and the net interest margin edged up to 2.53%, helped by cheaper FCNR(B) deposits. Retail loans now make up 24% of the book, while treasury income fell 11.4%. The bank estimates a one-time ECL transition charge of ₹12,000–15,000 crore from FY28, which it plans to spread over two years.
why it matters
For markets, the rate hikes by the Reserve Bank of India could support the bank's margins, and lower government bond yields may ease pressure on treasury results. Still, the ECL transition and higher recurring credit costs could weigh on returns on equity. Moody's view on the risk-reward balance is an analytical opinion, not investment advice.
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sources
- What should investors do about Canara Bank’s stock? — Moody's, 7 November 2026 at 16:30 UTC
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