Banking Sector
Bank stocks gain on Q2FY27 updates; PNB, Canara, Indian Bank get Buy ratings
Bank stocks ended Monday’s trading session higher, driven by positive Q2FY27 business updates from several lenders. The rally was led by HDFC Bank, Punjab National Bank, Canara Bank, Union Bank of India, Indian Bank and Bandhan Bank, following the release of their quarterly performance figures.
The upward momentum was attributed to earnings updates shared by these banks for the second quarter of financial year 2026-27. According to a Motilal Oswal Financial Services report, private banks are expected to lead the growth in Q2FY27 earnings.
Punjab National Bank reported an 11.95% year-on-year increase in total business to ₹31.2 trillion, with domestic business rising nearly 10.8%. Global advances grew 14.8% annually, driven by domestic advances, while global deposits increased 9.9%, supported by 9.4% domestic deposit growth. Motilal Oswal assigned a ‘Buy’ rating to PNB with a target price of ₹135, implying 23% upside from its closing price of ₹112 on BSE, where it ended 1.91% higher.
Canara Bank recorded a 6.2% quarter-on-quarter jump in advances, primarily due to strong RAM growth. The brokerage noted that the bank’s calculated CD ratio rose to 80.9% from 80.2% in 1QFY27. Motilal Oswal retained its ‘Buy’ rating with a target price of ₹160, as the stock closed marginally higher at ₹118.60 on BSE.
Union Bank of India saw a 2.81% sequential rise in total deposits during Q2FY27. The bank’s share price closed 0.06% higher at ₹168.10 on BSE. Motilal Oswal maintained a ‘Neutral’ rating, setting a target price of ₹190.
Indian Bank reported robust gross advances, supported by healthy traction in the RAM segment. Deposits grew 12.4% annually, driven by strong CA deposits and FCNR (B) inflows of USD2.4 billion. The CD ratio increased marginally to 82.8% from 81.3% in the prior quarter. The stock gained to close at ₹808.40 on BSE, with Motilal Oswal maintaining a ‘Buy’ rating and a target price of ₹1025.
Bandhan Bank, however, showed soft business growth in Q2FY27, with its CASA ratio falling sharply to 26.7%. Asset quality metrics remained stable, with overall collection efficiency at 98.9%. The brokerage gave a ‘Neutral’ rating and a target price of ₹210, as the stock declined 3.7% to close at ₹168.8 on BSE.
The updates reflect divergent trends across public and private sector banks, with growth in advances and deposits influencing brokerage outlooks and short-term price movements.
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