Buy Punjab National Bank; target of Rs 125: Motilal Oswal

Motilal Oswal's research report on Punjab National Bank

Punjab National Bank (PNB) reported a healthy 3QFY25 PAT of INR45.1b (103% YoY growth, 24% beat), primarily driven by provisioning reversal. NII grew 7% YoY/5% QoQ to INR110.3b (in line), while NIM inched up 1bp QoQ to 2.93% (3.09% domestic NIMs). Loan book grew 16.8% YoY (4.9% QoQ) to INR10.7t, led by continued traction in retail loans, up 22.6% YoY/5.0% QoQ. Deposits grew 15.6% YoY/4.9% QoQ. As a result, the C/D ratio was broadly stable at 70%.

Outlook

With a steady RoA outlook and margin tailwinds, we see a favorable risk-reward. Our TP of INR125 is based on 1.0x Sep’26E ABV.