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Today's prices ask more of State Bank of India than of Canara Bank.
At current prices, buyers of Canara Bank are assuming about 12.5% return on equity against 17.4% in its own record; for State Bank of India it is 14.8% against 16.1%. That shows which share needs more to go right — not which is cheaper. How far each trades from its estimated fair value is in the full valuations.
- Valuation method: both on excess return.
- Size: State Bank of India is worth about 8.4 times Canara Bank on the stock market.
- Record: Canara Bank has grown revenue faster: Canara Bank compounded at about 16% a year (FY2019–FY2026) and State Bank of India at about 12% (FY2019–FY2026).
- What to watch: credit costs at Canara Bank; return on equity versus its own history at State Bank of India.
| Canara Bank | State Bank of India | |
|---|---|---|
| Price | ₹131 | ₹1,080 |
| Market cap | ₹1.19L Cr | ₹9.97L Cr |
| P/E | 5.8 | 11.0 |
| P/B | 1.01 | 1.62 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Excess return |
01Two businesses
A Bengaluru bank that absorbed Syndicate Bank
Canara Bank, founded in 1906 in Mangaluru, is one of India's largest public-sector banks and is majority-owned by the Government of India. It merged with Syndicate Bank in April 2020, adding branches and customers across the south and beyond.
The bank the whole country runs on
State Bank of India is the country's largest bank by deposits, loans, branches and customers, and it is majority-owned by the Government of India. It lends to everyone from farmers and home buyers to the largest corporates, and its group includes SBI Life, SBI Card, the SBI Mutual Fund asset manager and SBI General Insurance.
02The records side by side
Canara Bank has grown revenue faster: Canara Bank compounded at about 16% a year (FY2019–FY2026) and State Bank of India at about 12% (FY2019–FY2026). By revenue, State Bank of India is about 4.6 times the size of Canara Bank. Canara Bank kept 11.2% of revenue as net profit in FY2026; State Bank of India kept 12.0% of revenue as net profit in FY2026. Canara Bank reported a net loss in FY2020; State Bank of India was profitable in every year shown.
Full ten-year tables and charts are on each company's page: Canara Bank · State Bank of India.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Credit costsLower provisions drove the recovery.
- Return on equityWhether returns stay near recent levels.
- Return on equity versus its own historySBI's value depends on whether recent returns hold through a full credit cycle — something it has not shown before.
- Credit costsBecause the book is so large, even a modest rise in fresh bad loans would show up quickly in profit.
05What could go wrong
- Asset qualityA new credit downturn would hit profit.
- Policy lendingGovernment priorities can shape lending.
- A turn in corporate creditSBI's history shows how fast large-company defaults can erase years of profit.
- Staff and pension costsWage settlements at a public-sector bank are less flexible and can lift costs in step.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is Canara Bank or State Bank of India better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, Canara Bank trades at 5.8 times earnings and 1.01 times book value, and State Bank of India at 11.0 times earnings and 1.62 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between Canara Bank and State Bank of India?
Canara Bank, founded in 1906 in Mangaluru, is one of India's largest public-sector banks and is majority-owned by the Government of India. State Bank of India is the country's largest bank by deposits, loans, branches and customers, and it is majority-owned by the Government of India.
Are Canara Bank and State Bank of India valued the same way?
Yes — both on excess return, so their workings compare like for like.
What does today's price assume for Canara Bank and State Bank of India?
Worked backwards from the share price, Canara Bank needs about 12.5% return on equity and State Bank of India about 14.8% return on equity, against 17.4% and 16.1% in their own records.