Neutral Punjab National Bank; target of Rs 75 : Motilal Oswal

Motilal Oswal's research report on Punjab National Bank

Punjab National Bank (PNB) reported a healthy quarter, with a 28% beat on PAT primarily driven by lower provisions. PAT surged 327% YoY to INR17.6b, while NII grew 20% YoY (in line) to INR99b as NIMs improved 3bp QoQ to 3.11% in 2QFY24. Loan book grew 15% YoY (3% QoQ) to INR8.9t, led by a healthy traction in corporate and retail loans. Deposits grew 10% YoY (flat QoQ) to INR13t. CASA ratio increased 25bp QoQ to 42.2%.  Slippages dipped to INR18b (0.9% annualized) enabling a 77bp/51bp QoQ decline in GNPA/NNPA ratios to 6.96%/1.47%. PCR rose 416bp QoQ to 80%.

Outlook

We maintain our estimates and project an RoA/RoE of 0.6%/9.0% in FY25. Reiterate Neutral with a TP of INR75 (premised on 0.8x FY25E ABV).