Neutral Punjab National Bank; target of Rs 30: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Punjab National Bank

PNB reported a weak operating performance, impacted by a 6% QoQ decline in NII, despite a loan growth of 5%. Domestic margin contracted by 15bp QoQ to 2.86%. PPOP fell 7% YoY to INR52.6b (2% miss). On the asset quality front, slippages stood elevated yet again (~6.2% annualized) at INR105b, a jump of 111% QoQ. All business segments, Retail (INR11b), Agri (INR28b), MSME (INR28b), and Corporate (residual) contributed to slippages. Total restructured book (COVID-19 and earlier schemes) stood at 2.4% of loans (v/s 2.8% in 3QFY22). Total SMA overdue (over INR50m) saw a sharp improvement QoQ at INR1.2b (0.02% of loans) as against INR30.9b (0.42% of loans) in 3QFY22. We cut our FY23/FY24 earnings estimate sharply by 23%/26% as we build in higher provisioning and project a RoA/RoE of 0.5%/6.6% by FY24. We maintain our Neutral rating.

Outlook

We cut our FY23/FY24 earnings estimate by 23%/26% as we build in higher provisioning and estimate a RoA/RoE of 0.5%/6.6% in FY24E. We maintain our Neutral rating with a TP of INR30/share (0.4x FY24E ABV).

More Info

At 11:21 hrs Punjab National Bank was quoting at Rs 34.50, up Rs 1.00, or 2.99 percent.

It has touched an intraday high of Rs 34.55 and an intraday low of Rs 33.45.

It was trading with volumes of 1,329,870 shares, compared to its thirty day average of 2,355,615 shares, a decrease of -43.54 percent.

In the previous trading session, the share closed up 1.52 percent or Rs 0.50 at Rs 33.50.

The share touched its 52-week high Rs 47.60 and 52-week low Rs 28.05 on 26 October, 2021 and 20 June, 2022, respectively.

Currently, it is trading 27.52 percent below its 52-week high and 22.99 percent above its 52-week low.

Market capitalisation stands at Rs 37,988.00 crore.

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Punjab National Bank - moti