PSU bank stocks rally: SBI, Bank of Baroda, Canara Bank near record high

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PSU banks share price today

 

Shares of public sector undertaking (PSU) banks continued at their upward movement, with Nifty PSU Bank index gaining 1 per cent in Monday’s intra-day trade. In comparison, the Nifty 50 was up 0.12 per cent at 26,234.15 at 11:11 AM.

 

State Bank of India (₹991.20), Bank of Baroda (₹297.75), Indian Bank (₹890), Canara Bank (₹153.68)  and Punjab National Bank (₹126.26) were up in the range of 1 per cent to 3 per cent on the National Stock Exchange (NSE) in intra-day deals, data showed.

 

SBI share price had hit a record high of ₹999 on November 26, 2025, while Indian Bank stock price touched all-time high of ₹898.60 on November 18. On the other hand, Bank of Baroda stock had hit an all-time high of ₹298.45 on June 3, 2024; Canara Bank stock touched a record high of ₹164.19 on November 9, 2010, data reveals.

 

Meanwhile, Nifty PSU Bank index has bounced back 55 per cent from its 52-week low level of 5,530.35 touched on March 3, 2025. The index had hit an all-time high of 8,665.70 on November 26, 2025.

 

Why public sector banks outperforming market?

 

In the second quarter (July to September) of the financial year 2025-26 (Q2FY26), the net profit of public sector banks (PSBs) recorded a year-on-year (YoY) growth rate of 4.7 per cent, as compared to a decline of 2.1 per cent YoY for Private Sector Banks (PVBs). The rise in PSB profits is mainly attributed to fee income and treasury gains, alongside credit growth in the retail and MSME segments, and normalised operating expenses, according to CareEdge Ratings.

 

PSBs’ profitability was buoyed by gains in fee income, and a few banks benefited from the income tax refunds. Additionally, PSBs’ relatively lower Credit-to-Deposit (CD) ratios (around 78 per cent compared to 90 per cent for PVBs) have provided them with greater lending headroom, and the overall improvement in asset quality has supported this growth, the rating agency said.

 

Return on Assets (RoA, annualised) of Scheduled Commercial Banks (SCBs) reached 1.29 per cent in Q2FY26, declining by 11 bps YoY, attributed to margin pressures due to rate cuts. Meanwhile, RoA for SCBs rose sequentially by one bp, driven by PSBs, attributed to slightly increased margins in the current quarter, business growth and overall improvement in the asset quality.

 

Going forward, for H2FY26, profitability of SCBs is expected to improve, supported by festive-season demand and additionally supported by credit growth, the benefit from a lower CRR requirement, and a gradual normalisation of unsecured and MFI segment slippages.

 

According to Saurabh Bhalerao, Associate Director, CareEdge Ratings, “PSBs have continued to outpace PVBs, supported by a low base and relatively moderate CD ratios, which offered greater lending headroom. Asset-quality stress in the microfinance and other small-ticket portfolios remained more pronounced for PVBs, although pressures showed early signs of stabilisation. Capital positions stayed strong across the system, with most banks maintaining buffers well above regulatory requirements, supported by sustained bond issuances, recent QIPs by large PSBs, and additional capital-raising plans lined up for the remainder of the fiscal year.”