Accumulate PNB; target of Rs 1036: Angel Broking

29091 Investors following PNB. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate PNB; target of Rs 1036: Angel Broking

Angel Broking is bullish on Punjab National Bank (PNB) and has recommended accumulate rating on the stock with a target of Rs 1036 in its February 1, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy City Union Bank; target Rs 53: Dolat Capital Buy TVS Motor; target Rs 68.10: BP Equities Accumulate Berger Paints; target Rs 109: Emkay ALSO READ See previous views by Angel Broking See what other Experts & Brokerages are saying about PNB See messages about PNB PNB BSE | NSE 30/05/12 Are Mutual Funds betting on PNB?

Angel Broking is bullish on Punjab National Bank (PNB) and has recommended accumulate rating on the stock with a target of Rs 1036 in its February 1, 2012 research report.

"For 3QFY2012, PNB registered a moderate set of results with net profit growing by 5.5% yoy to Rs1,150cr, which was below our estimates on account of higher provisioning expenses than estimated by us. We recommend an Accumulate rating on the stock."

"The bank's business growth momentum picked up during 3QFY2012. Advances for the bank increased by 5.5% qoq (18.7% yoy). On a yoy basis, advances growth was driven by loans to MSME's and retail which grew by 18.5% and 19.7%, respectively. Deposits growth on a qoq basis stood at 4.3% qoq (up 23.4% yoy), however CASA deposits growth was muted at 1.6% qoq (up 11.7% yoy). Saving account deposit growth was slightly better at 2.2% qoq (up 14.3% yoy). Consequently, reported CASA ratio declined by 90bp qoq and 350bp yoy to 36.2%. The banks reported NIMs slipped by 7bp to 3.9% during 3QFY2012 on back of 22bp qoq rise in the cost of deposits to 6.7%. The yield on advances was nearly flat sequentially at 12.0%. Fee income picked up sequentially, driven by higher forex income (up 15.8% qoq) and recoveries (up 35.3% qoq). On the asset-quality front, the bank surprised negatively with slippages rate jumping to 2.8% (1.6% in 2QFY2012). However, the management attributed this sharp jump in slippages to primarily an aviation account which slipped during the quarter. Consequently, the NPA levels rose sharply qoq with gross NPAs rising by 25.1% qoq and net NPA rising by 38.9% qoq. The bank restructured Rs1,989cr worth of accounts during 3QFY2012, of which Rs978cr was to a telecom account. The bank also took a hit of Rs150cr for NPV loss on this telecom account during the quarter. The total outstanding restructured book as of 3QFY2012 stands at Rs16,687cr."

"The bank's valuations are currently at low 1.1x FY2013 ABV compared to its five year range of 1.1-1.6x and median of 1.4x, due to the asset quality concerns facing the sector. Taking into account the bank's relatively lower cost of deposits than peers and valuations at the lower end of its historical trading range, we currently have a positive stance on the bank. Hence, we recommend an Accumulate on the stock with a target price of Rs1,036," says Angel Broking research report.

Public holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment