Nifty Bank Falls 16% in 5 Weeks: 3 Stocks to Watch Amid the Bloodbath

#2 Canara Bank

Next on the list is Canara Bank.

In the past 5 weeks, Canara Bank share price has declined 19% while in 2026 so far, the stock is down 18%.

Canara Bank is a Bengaluru-based public sector bank established in 1906. Effective April 2020, Syndicate Bank was amalgamated with Canara Bank, and the current version is the fourth-largest PSB.

The government of India is the majority shareholder holding 62.93% stake in the bank followed by LIC of India.

As of December 2025, Canara Bank had 10,066 branches and 7,048 ATMs. It also has four international branches at New York, London, Dubai, and IBU in Gift City.

Coming to Canara Bank's financials, the company's sales have grown at a CAGR of 20% over the past 5 years.

Meanwhile, profit growth has been phenomenal. It reported a profit of Rs 28,906 m five years back in 2021 which has now climbed past Rs 175,396 m as of FY25.

The average ROE over the same period has come in at 12%. It has reported consistent profit growth in recent quarters.

A major historical issue for PSU banks has been NPAs. Canara Bank's gross and net NPA ratios have declined meaningfully, indicating cleaner loan books and better credit risk management.

Further, higher Provision Coverage Ratios (PCR) also provide buffers against credit shocks.

As a major public sector bank, Canara Bank also benefits from strong sovereign backing. Rating agencies often treat this as a strength, which can limit downside risk relative to private peers in high stress scenarios.

However, despite all these improvements, the bank still carries some exposure to stressed sectors, and fresh slippages could re-emerge if economic conditions weaken.

For more details, check out Canara Bank's financial factsheet.

#3 HDFC Bank

Third on the list is HDFC Bank.

In the past 5 weeks, HDFC Bank share price has declined 15% while in 2026 so far, the stock is down 24%.

HDFC Bank is the largest private sector bank in India.

As of December 2025, HDFC Bank's distribution network was at 9,616 branches and 21,176 ATMs across 4,170 cities.

The bank's international operations comprise four branches in Hong Kong, Bahrain, Dubai, and an IFSC Banking Unit (IBU) in Gujarat International Finance Tech City.

It also has five representative offices in Kenya, Abu Dhabi, Dubai, London, and Singapore.

In recent weeks, HDFC Bank shares have come under pressure due to management changes. On 18 March 2026, Atanu Chakraborty resigned as the part-time Chairman and Independent Director with immediate effect.

In his resignation letter, Chakraborty pointed to certain happenings and practices within the bank over the last two years that did not align with his personal values and ethics. The stock tanked over 7% that day but its management was quick enough to calm investor nerves.

To maintain stability, the bank quickly made a transition plan and appointed Keki Mistry (former CEO of HDFC Ltd) as the Interim part-time Chairman for a period of three months.

Coming to HDFC Bank's financials, the bank's sales and net profit have grown at a CAGR of 23% and 21%, respectively over the past 5 years.

Its ROE has averaged 15% during the same period.

While the bank is currently navigating the complexities of its massive merger, a task that naturally involves short-term adjustments in margins and operational integration, its core engine remains remarkably resilient.

The bank remains optimistic about outpacing loan growth in FY27, a trajectory it has been indicating over the past several quarters.

Going forward, the bank plans to deepen its customer base while stepping up engagement efforts, with a sharper focus on granular deposit mobilization.

For more details, check out HDFC Bank's financial factsheet.

Conclusion

The recent slide in the Nifty Bank index is worrying. A weakening rupee, surging bond yields, an active war keeping oil above US$ 100, and a sweeping RBI forex directive, all landing in the same five-week window.

The silver lining, thin as it is, lies in valuation. Many of these names are now trading near multi-year lows, and the risk-reward is beginning to tilt slowly in the investor's favour.

But caution is the operative word here.

With unresolved global tensions, rising oil prices, and continued FII outflows, the trajectory of earnings revisions remains the key determinant of market direction.

As things are now, many banks have started to report their updates for Q4 and there are already signs of improvement.

Investors should track that space closely to see if there are any pockets where momentum is being built.

Investors should also evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Happy investing.

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