Canara Bank Q1 Preview: Asset Quality To Remain Stable But Earnings May Disappoint With NIM Compression Risk

On Thursday, July 24, 2025, Canara Bank is scheduled to release its financial results for the first quarter/three months that concluded on June 30, 2025. The weak technical setup is still the major emphasis, even if PSU Bank will soon release its Q1 results.

In terms of earnings, Gaurav Goel (Entrepreneur and SEBI-Registered Investment advisor) said profitability is likely to remain steady while asset quality will improve. Net profits are expected to increase by 10% year on year, while the operating margin is likely to be flat over the previous year. Net income interest is likely to increase by 7%. EPS will be stable while ROA is likely to be steady at slightly above 1%. Gross and net NPA ratios may decline marginally. Credit growth is expected in the range of 10-12%.

Canara Bank Q1FY26 Preview: Modest Growth with NIM Compression Risk

Based on the Equirus Research report, Canara Bank is expected to experience qoq advances/ deposit growth at 1.2%/0.5%. NIMs are expected to compress by 20-25bps owing to rising funding costs, whereas asset quality is expected to remain stable.

Comments on asset quality, trends in business growth and NIM guidance are the key things to look for in Canara Bank during Q1FY26 as per Equirus Research. Canara Bank may report flat quarterly earnings with little room for growth in the foreseeable future.

Canara Bank is anticipated to record a subdued performance for Q1FY26, influenced by margin compression, according to a study from InCred Equities - InCred Group. According to InCred Equities, the bank's net interest margin (NIM) is expected to drop from 2.73% in Q4FY25 to 2.60%, a 13 basis point quarterly reduction.

At Rs 9,200 crore, net interest income (NII) is predicted to be flat, representing a 2.9% QoQ drop and a 0.1% YoY rise. PAT may shrink by 23.4% QoQ to Rs 3,800 crore, while the bank's pre-provision operating profit (PPOP) is projected to be Rs 7,100 crore, down 13.8% QoQ.

Canara Bank Share Price Target

"Canara Bank will soon report its Q1 results, but the focus remains on the weak technical setup. The stock recently broke below an important support level of ₹110, which is a bearish signal. This breakdown has opened the door for further downside, with possible targets of ₹100 and even ₹95 in the short term. The overall chart looks negative, and there's no sign of a reversal yet," commented Riyank Arora, technical analyst at Mehta Equities.

"To turn positive, the stock must close and hold above ₹120 - only then will the trend improve. Until that happens, traders should avoid fresh buying and consider selling on any bounce. While the Q1 numbers may offer some support if they surprise on the upside, the technical structure suggests weakness is likely to continue unless a strong move changes the trend," the analyst further added.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.