Transcript of Earnings Conference Call with Analysts/Investors call Q1 FY 2025-26 held on July 24, 2025
CANBK · price
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Canara Bank reported strong Q1 FY26 results, with net profit of ₹4,752 crore, up 21.69% year-on-year, and operating profit hitting an all-time high of ₹8,554 crore (up 12.32% YoY). Global business grew 11% to ₹25.63 lakh crore, while credit growth of 12.42% surpassed the bank's 10-11% guidance. Asset quality improved sharply, with gross NPA falling to 2.69% (down 145 bps) and net NPA to 0.63% (down 61 bps), while PCR rose to 93.17%. RAM credit grew 15% and retail credit surged 34%. However, NIM declined ~17 bps to around 2.55% due to 100 bps of repo rate cuts being passed on to borrowers faster than deposit repricing. Management guided that NIM will likely hold around 2.5% in Q2 and may gradually recover in H2 if no further rate cuts occur, conceding the original 2.75-2.80% full-year guidance may be tough to achieve given expected further rate cuts.
Strong earnings beat and asset quality improvement are positives, but margin pressure from rate cuts and management's admission that the NIM guidance may be missed could weigh on the stock. The treasury income boost (~₹1,000 crores one-off) and PSLC gains helped mask some underlying margin weakness that may surface in coming quarters.