Canara Bank Shares Fall 6% After Q2 Results: Buy, Sell or Hold

Canara Bank shares fell as much as 6.5% to ₹117 on October 15, 2026, despite an 8% year-on-year rise in Q2 FY27 standalone net profit to ₹5,175 crore.

Net interest income (NII) increased 20% to ₹11,005 crore from ₹9,141 crore a year earlier. Brokerages remain divided on the stock.

Canara Bank Q2 Results: Key Numbers

Metric	Q2 FY27
Net profit	₹5,175 crore
Profit growth	Over 8%
Net interest income	₹11,005 crore
NII growth	Over 20%
Intraday share price fall	6.5%
Intraday low	₹117

Canara Bank Share Target Price

Brokerage	Rating	Target Price
Morgan Stanley	Underweight	₹109
Motilal Oswal	Buy	₹160
JM Financial	Buy	₹150

Morgan Stanley expects limited scope for valuation re-rating despite stronger-than-expected quarterly profit. It raised its FY27 and FY28 earnings estimates but remains cautious about the stock's valuation.

Motilal Oswal maintained its Buy rating, citing improved margins, lower provisions and better asset quality. It expects net interest margins of 2.5% to 2.6% in FY27 and loan growth of 11% to 12%.

JM Financial upgraded the stock to Buy, citing improving fundamentals, steady margins and attractive valuations. It also highlighted a 14% rise in book value over the past year.

What Should Investors Watch?

Key factors include deposit growth, net interest margins, asset quality and the potential impact of expected credit loss provisions. Canara Bank may need additional provisions of ₹12,000 crore to ₹15,000 crore, potentially affecting its capital adequacy ratio by 1 to 1.2 percentage points.

Canara Bank Shares: Final Takeaway

Canara Bank reported stronger Q2 FY27 earnings, but its shares declined sharply. While Motilal Oswal and JM Financial remain positive, Morgan Stanley is cautious about valuation. Investors should assess the risks and their financial goals before making investment decisions.