Prabhudas Lilladher has maintained its outperformer rating on Punjab National Bank with a target price of Rs 650 in its May 16, 2008 research report. "PNB’s Q4FY08 net profit grew by 128% YoY at Rs 5.4 billion, 51% higher than our estimate. Key drivers were a significant 73% YoY decline in provisions and lower than expected staff expense. NII stood at Rs 15.1 billion for Q4FY08, growing by 7% YoY, while NIMs have remained stable at 3.66%. Fee income remained stable, growing at 9.8% YoY to Rs 3.25 billion."

"PNB is likely to regain some lost ground on the valuation side; certain technical NPAs from Q2FY08 onwards had resulted in the deterioration of its asset quality and impacted valuations. At the CMP, the stock is quoting at 5.8x FY10E EPS, 1.1x FY10E BV and 1.2x FY10E ABV. Maintain our Outperformer rating with a target price of Rs 650," says Lilladher's research report.

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