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Punjab National Bank Shares Surge After Strong Q1 Results

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2 months ago

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Punjab National Bank (PNB) has had quite a week, with its shares jumping over 7% following a strong set of Q1 results that were released over the weekend. The bank reported its highest-ever quarterly standalone profit of ₹3,252 crore, which is a massive 159% increase compared to the same period last year.

The surge in profits was mainly driven by an increase in interest revenue and a significant drop in bad loans. The net interest income (NII) for the first quarter climbed by 10.2%, reaching ₹10,476.2 crore. This positive performance caught the attention of analysts, prompting many to reassess their expectations for the bank.

Nirmal Bang Institutional Equities has revised its target price for PNB shares from ₹120 to ₹124, valuing the bank at 1.1 times its June 2026 adjusted book value. Meanwhile, analysts from MOFSL raised their earnings estimates for FY25 by 5.6%, reflecting healthier net interest income and reducing provisions.

Jefferies India Pvt ltd was also optimistic about PNB, setting a target price of ₹150, with a projection of continued strong earnings. They noted that despite some confusion regarding higher operational costs in Q1, such expenses are not expected to recur. Positive asset quality metrics and low slippage rates were highlighted as key reasons for this optimistic outlook.

Moreover, PNB’s management is focused on improving its share in the retail and agriculture loan segments, which should contribute positively to its margins. The bank reported an impressive reduction in its gross non-performing assets (NPAs) and expects to maintain a lower credit cost going forward.

However, despite these encouraging results, some analysts remain cautious. Kotak Institutional Equities expressed concerns about PNB’s current valuation, deeming it expensive and suggesting a lower target price of ₹110. Nonetheless, the general sentiment in the market remains positive, as many see potential growth in PNB’s stock as it continues to show signs of recovery and improvement.

Rachel Adams

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