Why is Central Bank of India Share falling/rising?

Why is Central Bank of India Share falling/rising?

Central Bank of India’s share has been volatile because short‑term technical and sector cues are negative even as fundamentals and profitability have improved sharply over the last few quarters. The stock is correcting from a big multi‑year rally, underperforming PSU peers and trading well below its 52‑week high, which magnifies every bout of profit‑booking and sector weakness.​

Recent Price Trend

As of early December 2025, the share trades around ₹36–37, down sharply from a 52‑week high near ₹62, and has fallen roughly 5–6% over the last month and much more from its peak. Year‑to‑date performance has been weak compared with the broader indices, with one analysis citing a near 25% decline versus gains in the benchmark, reflecting a classic post‑rally cool‑off phase.​

Short‑term moves on individual days are being driven by market‑wide selling in PSU banks, where the sector index itself has corrected, and by the stock trading below key moving averages, which triggers further technical selling. At the same time, increasing delivery volumes show some investors are using dips to accumulate, cushioning deeper falls.​

Why the Stock Falls

Several near‑term factors have pressured the stock:

• Sector‑wide PSU bank weakness: Recent corrections in public‑sector banks have dragged Central Bank down, even without stock‑specific bad news on some days.​

• Technical breakdown: The price has slipped below major moving averages, turning technical indicators negative and prompting quant/technical selling.​

• Supply after capital raise: Earlier in FY25, the bank conducted a QIP, after which the stock fell about 17% over three days as fresh supply hit the market and traders booked profits.​

• Valuation cool‑off: After a strong multi‑year rerating from sub‑₹20 levels, even minor disappointments or global risk‑off phases now trigger steeper corrections as investors lock in gains.​

Despite recent earnings beats, any hint of slower improvement in asset quality, elevated GNPA versus top PSU peers, or negative surprises in operating cash flows keeps the market cautious and limits immediate re‑rating.​

Why the Stock Rises

On the upside, there is a solid fundamental story that keeps pulling the stock higher after every deep correction:

• Strong profit growth: Net profit has grown at an impressive multi‑year CAGR of around 40–43%, with recent quarters logging record PAT above ₹1,200 crore.​

• Improving asset quality: Gross NPA has fallen from about 4.6% to nearly 3.0% over the last year, and net NPA is below 0.5%, indicating much cleaner books.​

• Capital strength and ROE: The bank’s capital adequacy ratio is above 17%, Tier‑1 near 15%, and ROE is around the low‑double‑digit mark, improving the risk‑reward profile for equity investors.​

• Attractive valuation: The stock trades well below book value multiples of many PSU peers (P/BV under 1x and low‑teens or single‑digit P/E), leading some analysts to flag it as “discounted with strong earnings momentum”.​

Institutional interest has in fact risen over time, with analyses pointing to higher institutional shareholding and positive commentary around the bank’s turnaround, which helps the stock recover whenever broader sentiment stabilises.​

Fundamental Picture Behind the Moves

Recent quarterly results underline why long‑term investors still see merit despite price volatility. The bank’s Q2 FY26 numbers showed net profit above ₹1,215 crore, higher than the previous year and quarter, supported by loan growth of around 16% year‑on‑year and a continued drop in GNPA and NNPA. Advances have expanded from about ₹2.44 lakh crore to over ₹2.83–2.93 lakh crore within roughly a year, showing healthy business growth.​

At the same time, operating cash flows have recently turned negative on an annual basis due to growth and working‑capital dynamics, and GNPA, though improved, still sits higher than the cleanest PSU names, which keeps a valuation discount in place. The government’s nearly 89% stake means strong backing and capital support, but also caps near‑term free‑float and can weigh on rerating until further stake dilution or strategic changes occur.​

Putting It Together for Investors

In summary, the share tends to fall when: sector‑wide PSU sentiment weakens, the stock trades below key technical levels, fresh equity supply or profit‑booking hits, or the market focuses on still‑elevated GNPA and patchy cash flows. It tends to rise when: quarterly results reaffirm strong profit growth, asset quality continues to improve, valuations look cheap versus peers, and institutional flows turn supportive.​

Factor	Effect on price	Evidence
PSU bank sentiment & index moves	Drives short‑term falls/rises along with the PSU pack, regardless of stock‑specific news. ​	​
Technicals (moving averages, underperformance)	Breaks below key averages and 1‑year underperformance trigger selling and volatility. ​	​
Earnings & asset quality	Record PAT, lower GNPA/NNPA and higher ROE support rallies after results. ​	​
Valuation & ownership	Low P/BV and P/E plus rising institutional interest attract value buyers, but high govt stake caps rerating. ​	​
Capital actions (QIP, dilution)	Fresh supply and post‑issue profit‑booking can trigger sharp short‑term declines. ​	​