Canara Bank shares extend slide after Q3 results; Antique downgrades stock

Antique said margin pressures stemming from recent deposit rate hikes and broader funding cost trends underpin Canara Bank's stock downgrade to Hold

Shares of Canara Bank Ltd extended their decline on Friday, falling over 2 per cent, after a domestic brokerage downgraded the stock following its third-quarter earnings for the current financial year (Q3-FY26).

 

The lender's stock fell as much as 2.46 per cent during the day to ₹146.6 per share, a day after it fell over 5 per cent. Canara Bank stock pared losses to trade 1.5 per cent lower at ₹148.4 apiece, compared to a 0.47 per cent decline in Nifty 50 as of 9:40 AM. 

 

Shares of the company fell for the second straight session and currently trade at 2.8 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 4.3 per cent this year, compared to a 3.4 per cent decline in the benchmark Nifty 50. Canara Bank has a total market capitalisation of ₹1.34 trillion.   READ STOCK MARKET UPDATES TODAY LIVE

 

Canara Bank Q3 results 

The lender reported a 25.6 per cent year-on-year (Y-o-Y) rise in its net profit to ₹5,155 crore for Q3 FY26, driven by a rise in its non-interest income. The state-owned lender’s non-interest income rose 36.16 per cent Y-o-Y to ₹7,900 crore in Q3 FY26.

 

 Net interest income (NII) — the difference between interest earned and interest expended — went up 1.13 per cent to ₹9,252 crore. Net interest margin for Q3 fell to 2.45 per cent as compared to 2.71 per cent in the year-ago period.

 

Asset quality for the lender saw improvement from the previous quarter. Gross non-performing assets stood at 2.08 per cent from 2.35 per cent in September, and 3.34 per cent a year ago.

Analysts on Canara Bank earnings 

According to Antique Stock Broking, Canara Bank reported weak performance across both core and non-core income streams, prompting the brokerage to downgrade the stock to 'Hold' with a target price of ₹165. While Antique has raised its loan growth estimates by 100-50 basis points (bps) for FY26 to FY28, it has cut margin estimates by 35-40 bps for FY27 and FY28 due to rising deposit cost pressures. 

 

These include a 30 basis point cut in net interest margin guidance for FY26, a 35 basis point hike in peak term deposit rates in January 2026 compared with 10-15 basis points by some peers, steepening certificate of deposit rates, and pending marginal cost of funds-based lending rate transmission.  ALSO READ | Dixon Technologies share price jumps 5% despite mixed brokerage views on Q3 show 

The brokerage also flagged concerns over the bank's low non-specific provision buffer of around 40 bps of net advances as of March 2025, noting that Canara Bank has not created buffer provisions for expected credit loss requirements in recent quarters, unlike some other public sector banks. Antique said margin pressures stemming from recent deposit rate hikes and broader funding cost trends underpin its downgrade to Hold.  According to Emkay Global, it has largely retained its earnings estimates and expects the bank to deliver a return on assets of around 1.1 per cent, aided by one-off gains from stake sales in subsidiaries, before normalising to 1 per cent over FY27 and FY28. The brokerage has reiterated its 'Buy' rating on the stock and maintained its target price at ₹170.

 

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