Sharekhan has given Hold recommendation for Punjab National Bank with a target price of Rs. 33 in its research report issued on Jul 29, 2022
Sharekhan’s research report on Punjab National Bank
Punjab National Bank (PNB) reported PAT at Rs. 308 crore (-70% y-o-y/+53% q-o-q), which was significantly below street’s expectations (65%) mainly on account of higher credit cost (2.6% of average advances). However, asset quality improved with GNPA/NNPA ratios falling by 51 bps/52 bps q-o-q, at 11.27%/4.28%. Slippages were down 38% q-o-q to Rs. 6,468 crore. Although slippage ratio was reported at 3.9% (annualised), it is still very high compared to peers. NII grew mutedly by 4% y-o-y/3% q-o-q, trailing advances growth of 12% y-o-y. NIM improved by 3 bps q-o-q, reported at 2.79%. Operating profit declined by 12% y-o-y and grew by 2% q-o-q.
The stock currently trades at 0.5x/0.5x its FY2023E/FY2024E BV, which reflects weak business franchise and below-par return profile. We believe higher stress in books compared to peers and lower operating profit would keep returns ratio below par. We maintain our Hold rating with an unchanged PT of Rs. 33.
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.