CLSA
CLSA has an “outperform” rating on PNB with a price target of ₹135 per share.
The brokerage said Punjab National Bank reported an optical profit after tax (PAT) beat of 16% driven by lower-than-expected opex and credit costs.The key disappointment was its net interest income (NII), which declined 3% sequentially despite growth in its loan book, CLSA said.
PNB’s loan growth of 13.7% from the previous year was slightly below estimates, it said. Meanwhile, the lender’s deposit growth of 9% from the previous year was in-line with the previous quarter, but was clearly a slowdown from FY25, the brokerage said.
As a result, CLSA has cut its financial year 2027 and 2028 Profit After Tax (PAT) estimates by 3% on account of lower net interest income.
Jefferies
The brokerage has a “buy” call on PNB with a price target of ₹130 per share.
It said the bank’s fourth quarter profit was ahead of its estimates.
PNB loan growth improved to 14% from the previous year, but its net interest margin (NIM) compression dragged its NII.
Jefferies added that the loan-to-ratio allows the bank to grow loans despite soft deposit growth of 9%, Jefferies said.
The lender’s ability to sustain return on assets despite transition to ECL will be key, the brokerage added.
Morgan Stanley though is bearish on PNB, as its “underweight” rating comes with a price target of ₹88, which implies a downside potential of 20% from current levels.
Reversal of retirement provisions, lower credit costs and bad loan recoveries drove a strong headline profit beat.
20 analysts have coverage on PNB, of which 11 have a “buy” rating, four say “hold” and five have a “sell” rating on the state-run lender.
PNB shares were up 2.4% at ₹110.45 apiece at 9.40 am on Wednesday. The stock has declined 11.3% this year, so far.
