PNB shares: Will Punjab National Bank FY25 guidance lift PSU stock? Price targets & more
MOFSL reported a substantial drop in PNB's Q1 provisions. It stated NII was roughly expected whereas NIM dropped somewhat.
Punjab National Bank (PNB) posted good Q1 results, with profit up 159% year-over-year due to falling provisions and significant recoveries. Gross NPAs fell considerably, with the PSU bank forecasting for 4% FY25 gross NPAs instead of 5%.
PNB lowered its credit cost projection for the year to 0.5% from 1%. Q1 performance and guidance impressed analysts, but lackluster return ratios prevented a stock rating increase.
PNB expects credit cost reversal due to better recoveries and lesser new slippages. The bank also reduced its FY25 capital raise to Rs 5,000 crore from Rs 7,500 crore. FY25 NIM guidance is 2.9-3.0%.
MOFSL reported a substantial drop in PNB's provisioning. It stated NII was roughly expected whereas NIM dropped somewhat.
PPoP missed due to Q1 PSLC expenditures and greater opex. Growth was strong, and management wants to increase its RAM portfolio share to boost profitability.
Recovery and write-off rates continue to rise, improving asset quality. MOFSL claimed PCR rose to 88% and asset quality ratios rose ".
This brokerage has raised its PNB profit projections by 5.6% for FY25 and 0.8% for FY26 due to decreased provisions, solid NII, and sustained margins. Based on 1.1x FY26E BV, it recommended Neutral with a revised TP of INR135 (vs. INR130).
Nirmal Bang Institutional Equities values PNB at 1.1 times June 2026 ABV and targets Rs 124 from Rs 120.
Nirmal Bang stated the value is 78% over the prior 5-year average multiple of 0.62 times, capturing a 40.5% earnings CAGR between FY24–FY26E due to a 12.1% loan CAGR, stable margins, and improving opex ratios and credit costs.
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