Shares of Punjab National Bank (PNB) gained more than 7% in morning trades on Monday, July 29, following the release of the bank’s Q1 results over the weekend.
The stock opened at Rs 124.86, nearly 4% higher than the previous close of Rs 119.95 on the NSE, and surged to intraday highs of Rs 128.80, marking gains of over 7%.
Q1FY25 Performance
PNB reported its highest-ever quarterly standalone profit of Rs 3,252 crore, driven by increased interest revenue and a reduction in bad loans. The net profit for the quarter rose 159% year-on-year.
Net Interest Income (NII) also saw a significant increase of 10.2%, reaching Rs 10,476.2 crore compared to Rs 9,504.3 crore in the same period last year.
Brokerages on Punjab National Bank
Jefferies on PNB
Analysts at Jefferies have set a target price of Rs 150 for PNB, highlighting a potential upside of around 20%. They noted that while Q1FY25 asset quality remained strong, the net profit was slightly below estimates due to higher operating expenses related to Priority Sector Lending Certificates (PSLCs).
Jefferies expects earnings to continue rebounding, with a lower slippage ratio of 0.8% and low credit costs anticipated for the next 1-2 years. They forecast a Return on Assets (RoA) of 0.9% by FY26 and maintain a “Buy” rating.
Kotak Institutional Equities on PNB
Kotak observed that PNB’s asset quality remains comfortable, with a net Non-Performing Loan (NPL) ratio of 0.6% and a slippage ratio of 0.8%. Advances grew by 12% year-on-year, led by retail and agriculture. Despite these positives, Kotak finds the current valuation of PNB shares expensive and has set a target price of Rs 110.
Motilal Oswal on PNB
Motilal Oswal raised their Earnings Per Share (EPS) estimates by 5.6% for FY25 and 0.8% for FY26, driven by lower provisions, strong NII, and stable margins. They estimate an RoA of 1.0% and Return on Equity (RoE) of 14.5% by FY26. Their target price for PNB is set at Rs 135.
Stock Performance in Last One Year
The shares of Punjab National Bank have demonstrated positive returns across various time intervals. In the last month, the stock delivered a positive return of 6.61%. Over the past six months, it exhibited strong momentum with returns of 38.80%, indicating a robust performance.
Year-to-date figures further emphasized the stock’s bullish trend, recording an impressive growth of 78.92%. Looking at the broader horizon, the shares have shown consistent strength, given returns of over 80% in the last year.