Punjab National Bank Q1 Review - Return Ratios To Remain Lower Despite Pick-Up In Recoveries: Nirmal Bang

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang Report.Punjab National Bank’s Q1 FY25 net interest income/pre-provision operating profit/profit after tax came in at a variation of -2.8%/-10%/ 19.8% versus our estimates. PAT was better than consensus estimate by 10% at Rs 32.5 billion (up by 159% YoY and 8% QoQ), supported by lower provisioning expenses (down by 66.9% YoY and 17.4% QoQ). Advances growth stood at 13.9% YoY on the back of growth in the retail segment. Deposit growth continued to remain lower at 8.5% YoY due to pressure on current account and savings account deposits. Gross non-performing asset improved from 5.7% in Q4 FY24 to 5% but still stood higher compared to other large public sector banks. We have valued PNB at 1.1 times June-26E adjusted book value (same as earlier) and have derived target price of Rs 124 (Rs 120 earlier). Our target multiple of 1.1x June’26E ABV is at a 78% premium to the past five-year average multiple of 0.62 times; this captures an earnings CAGR of 40.5% over FY24- FY26E on the back of loan CAGR of 12.1%, stable margins and improving opex ratios and credit costs, which will result in return on asset of 0.8%/0.9% in FY25E/FY26E. However, since the return ratios remain lower despite pick-up in recoveries, we maintain an ‘Accumulate’ rating on PNB..Click on the attachment to read the full report:.Punjab National Bank Q1: Profit More Than Doubles On Lower Provisions.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Punjab National Bank Q1 Review - Return Ratios To Remain Lower Despite Pick-Up In Recoveries: Nirmal Bang

Asset quality of newly originated loan book remains pristine, says the brokerage.

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Punjab National Bank Q1 Review - Return Ratios To Remain Lower Despite Pick-Up In Recoveries: Nirmal Bang

Asset quality of newly originated loan book remains pristine, says the brokerage.

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