Punjab National Bank shares will be in focus today, May 6 after the state-owned lender declared quarterly results for the previous fiscal year, along with dividend on Tuesday.
The bank reported a 14.4% rise in standalone net profit to Rs 5,225 crore, compared to Rs 4,567 crore in the same quarter last year, primarily driven by higher interest income. Total income dropped to Rs 36,319 crore during the quarter under review from Rs 36,705 crore in the year-ago period.
The public sector lender's net interest income - the difference between interest earned on loans and interest paid on deposits, declined 3.5% to Rs 10,380 crore, against Rs 10,757 crore in the year-ago period. Interest income rose Rs 32,157 crore during the March quarter from Rs 31,989 crore in the fourth quarter of the previous fiscal. Operating profit jumped 10.7% to at Rs. 7,500 crore compared to Rs. 6,776 crore in the corresponding quarter previous year. Provisions tumbled by 32.5% to Rs. 906 crore sequentially from Rs. 1,341 crore.
In addition to quarterly results, PNB board also recommended a dividend of Rs 3 per equity share for FY 2025-26, subject to approval of shareholders at the ensuing Annual General Meeting of the bank.
Should You Buy Or Sell?
Brokerages gave mixed reviews on PNB's Q4 show, while cutting target price of the stock. Kotak Securities highlighted steady asset quality at a target price of Rs 125, while Citi and Jefferies' flagged contracting net interest margin (NIM) with target price of Rs 103 and Rs 130 respectively.
Kotak Securities on Punjab National Bank
- Kotak maintains an Add rating and cuts the target price to Rs 125 from Rs 140.
- Profitability remained steady overall.
- RoE was supported by lower credit costs and lower retirement-related provisions.
- Asset quality remains stable with high PCR supporting low credit costs.
- However, core profitability remains weaker than peers.
UBS on Punjab National Bank
- UBS maintains a Neutral rating and cuts the target price to Rs 122 from Rs 140.
- Weak NII was offset by lower credit costs.
- Q4 PAT beat estimates due to lower opex and provisions.
- Loan growth remained modest while margins contracted 5 bps QoQ.
- Management guided for 12–13% loan growth and RoA above 1%.
Citi on Punjab National Bank
- Citi maintains a Sell rating and cuts the target price to Rs 103 from Rs 115.
- NIMs continued to contract.
- Provision write-backs and recoveries supported profitability.
- Loan growth lagged the system due to weaker retail traction, while MSME and overseas businesses drove growth.
- Slippages increased QoQ.
Jefferies on Punjab National Bank
- Jefferies maintains a Buy rating and cuts the target price to Rs 130 from Rs 134.
- Q4 NII miss was offset by lower opex and provisions.
- Loan growth improved, though NIM compression impacted NII.
- The bank has room to grow loans despite soft deposit growth.
- Slippages declined YoY and core credit costs remain controlled.
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