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Last Updated : Jun 23, 2020 07:03 PM IST | Source: Moneycontrol.com

Sell Punjab National Bank; target of Rs 30: Emkay Global Financial

Emkay Global Financial is bearish on Punjab National Bank has recommended sell rating on the stock with a target price of Rs 30 in its research report dated June 21, 2020.

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Emkay Global Financial's report on Punjab National Bank

Despite higher margins and other income, PNB once again reported a loss of Rs7bn, mainly due to higher NPA provisions in the quest to improve specific PCR. However, for full year FY20, the bank returned to profit after a gap of two years. Credit growth during Q4 was far better at 11% qoq/3% yoy, mainly led by strong growth in the corporate book, leading to better LDR and thus, margins stood at 2.4% (up 13bps qoq). Gross fresh slippages remained elevated at Rs50.2bn/4.4% of loans, however, higher write-offs led to lower NPAs qoq. This, coupled with higher credit growth, led to 210bps qoq improvement in GNPA ratio to 14.2%. Specific PCR also improved to 63%.


PNB continues to trade at rich valuations – 0.8x FY22 ABV (unadjusted post results). Currently, we have a Sell rating on the stock due to its weak asset quality, poor return ratios, weak internal controls and merger overhang with OBC/United Bank.

For all recommendations report, click here

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First Published on Jun 23, 2020 07:03 pm