Punjab National Bank (PNB) has received mixed views from brokerages after its Q2 earnings, with varied price targets reflecting the bank’s performance in asset quality and profitability.
Jefferies: Buy | Target Price: ₹135 | Upside: 36%
Jefferies reiterated a Buy rating on PNB, with a target price of ₹135, reflecting a 36% upside. The bank reported a significant year-over-year growth in PAT of ₹43 billion, driven by other income and lower credit costs. Jefferies highlighted a low slippage rate and a coverage ratio at 90%, which it expects will keep credit costs low in the coming years.
Citi: Sell | Target Price: ₹96 | Downside: 3%
Citi remains bearish on PNB, rating it a Sell with a target price of ₹96. While Q2 profit was above expectations, driven by treasury gains and recovery from written-off accounts, Citi raised concerns over declining net interest margins and rising employee costs. The bank’s credit-to-deposit ratio of 70% and employee cost increase contributed to a core pre-provision operating profit (PPOP) miss.
Motilal Oswal: Neutral | Target Price: ₹120 | Upside: 21%
Motilal Oswal is Neutral on PNB with a target price of ₹120. The brokerage increased EPS estimates for FY25 and FY26, driven by improvements in asset quality and reduced provisions. PNB’s gross NPA guidance was revised lower, indicating positive progress in managing bad loans, which provides stability but warrants a cautious stance.
PNB received mixed ratings, with Jefferies seeing significant upside due to improved asset quality, while Citi is cautious due to NIM decline and cost pressures. Motilal Oswal is neutral, acknowledging improved financial metrics but recommending caution on longer-term profitability.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should perform due diligence before making investment decisions.
