Today’s Stock Market: PNB Shares Rise More Than 7% Following Q1 Results
Punjab National Bank (PNB) shares gained over 7% in Monday morning trades following the announcement of robust Q1 results over the weekend.
PNB’s share price opened at ₹124.86, nearly 4% higher than the previous close of ₹119.95 on the NSE. The stock continued to climb, reaching intraday highs of ₹128.66, marking gains of over 6%.
Record Quarterly Profit
PNB reported its highest-ever quarterly standalone profit of ₹3,252 crore, driven by increased interest revenue and a reduction in bad loans. The net profit rose 159% year-on-year. The bank’s net interest income (NII) grew by 10.2%, reaching ₹10,476.2 crore in Q1 FY25 compared to ₹9,504.3 crore in the same period last year.
Analyst Reactions
Jefferies India Pvt Ltd has set a target price of ₹150 for PNB stock, indicating around a 20% upside. In their post-results report, Jefferies highlighted strong asset quality in Q1 FY25. Despite PNB’s net profit being slightly below their estimates due to higher operating expenses related to Priority Sector Lending Certificates (PSLCs), these are not expected to recur. Jefferies pointed to lower slippages and high coverage at 88% as key positives, forecasting low credit costs for the next 1-2 years. They project an ROA (Return on Assets) of 0.9% in FY26, with a potential fall in tax rates boosting ROA. Jefferies rates PNB stock as a “Buy” with a target price of ₹150.
Motilal Oswal Financial Services raised their EPS (Earnings Per Share) estimates for FY25 and FY26 by 5.6% and 0.8%, respectively, due to lower provisions, healthy NII, and steady margins. They estimate an ROA of 1.0% and an ROE (Return on Equity) of 14.5% in FY26, setting a target price for PNB shares at ₹135.
Valuation and Future Outlook
Kotak Institutional Equities noted that PNB’s asset quality is comfortable, with a net NPL (Non-Performing Loan) ratio of 0.6%, comparable to that of State Bank of India. They observed a slippage ratio of 0.8% and strong bad loan recoveries. Advances grew by 12% year-on-year, led by retail and agriculture. However, Kotak feels that PNB’s valuation is on the higher side, setting their target price at ₹110.
Overall, PNB’s impressive Q1 performance and optimistic analyst outlooks have bolstered investor confidence, driving significant gains in the stock price.
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