Neutral Punjab National Bank; target of Rs 130: Motilal Oswal

Motilal Oswal's research report on Punjab National Bank

Punjab National Bank (PNB) reported a 4QFY24 PAT of INR30.1b (5% beat), led by controlled provisions and robust other income. Opex was elevated and led to a 10% miss on PPoP. NII grew 9% YoY to INR104b (in line), while NIM contracted 5bp QoQ to 3.1% (3.25% domestic).

Outlook

PNB expects the credit cost and slippages to be contained at <1% and projects RoA at 1% by 4QFY25. We raise our EPS estimates by 7%/5% for FY25/FY26, factoring in lower provisions, healthy other income, and steady margins. We estimate an RoA/ RoE of 0.8%/12.8% in FY25 and 1.0%/14.5% in FY26. Reiterate Neutral with a revised TP of INR 130 (premised on 1.1x FY26E ABV).