Shares of Punjab National Bank (PNB) declined by more than 1 percent to Rs 111 per share on July 3, after the state-owned lender's April–June quarter (Q1FY26) business update fell short of brokerage expectations. Citi assigned a "sell" rating on the bank, while Morgan Stanley maintained its "underweight" stance.
So far this year, the stock of this state-run lender has surged 8 percent, in-line with benchmark Nifty 50's 7 percent rise during the same period.
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As per the bank's provisional quarterly business update, PNB's global advances rose 9.9 percent year-on-year to Rs 11.3 lakh crore in the April–June quarter. The lender also posted a 13 percent rise in global deposits, reaching Rs 15.9 lakh crore. Domestic deposits increased by 12 percent to Rs 15.4 lakh crore during the same period.
However, the public sector lender's global credit-deposit ratio remained flat at 71.2 percent when compared to the previous quarter. The credit-deposit ratio is a key metric that shows the percentage of total deposits a bank has extended as loans.
Citi set a target price of Rs 101 per share for PNB, implying a downside potential of around 9 percent from the day's low. The brokerage expects the RAM (Retail, Agriculture, MSME) segments to be the bank's main growth engines.
However, it noted that the reported gross advances growth of 9.9 percent year-on-year and 1.3 percent quarter-on-quarter fell short of its estimated 2.1 percent quarterly growth. Additionally, the reported deposit figures were also marginally below expectations.
Meanwhile, Morgan Stanley pointed out that the bank’s initial business update for the first quarter indicates that loan growth has now slowed to levels consistent with the broader banking system. It also highlighted that both domestic loan and deposit growth appear to have moderated compared to the previous quarter.
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