PNB Gilts Slumps 6.48% to ₹91.35 After Q2FY26 Posts ₹4.54 Cr Loss Amid Rising Bond Losses

Mumbai, 17 October 2025: PNB Gilts Limited (NSE: PNBGILTS, BSE: 532366) reported a net loss of ₹4.54 crore for the quarter ended 30 September 2025, reversing a profit of ₹16.01 crore in the preceding quarter and ₹11.47 crore in Q2FY25. The disappointing earnings triggered a decline in the PNB Gilts stock price, which dropped 6.48% to ₹91.35 by 12:09 p.m. IST, reflecting the impact of volatile government securities markets on the company’s primary dealer operations.

Incorporated in 1996 and listed since 2000, PNB Gilts Limited, a wholly owned subsidiary of Punjab National Bank, operates in government securities trading, underwriting, and money market operations as a primary dealer under the RBI, managing a portfolio of G-Secs, treasury bills, and money market instruments.

Revenue Drops 21.3% QoQ to ₹44,348.74 Lakh Amid Weak Bond Yields

PNB Gilts’ total income fell sharply to ₹44,348.74 lakh, down 21.3% quarter-on-quarter (QoQ) from ₹56,337.27 lakh in Q1FY26, and down 11.5% year-on-year (YoY) from ₹50,082.73 lakh in Q2FY25. The decline was largely driven by lower trading gains and reduced interest income in the secondary government securities market, where fluctuating yields created valuation pressures.

Finance Costs Surge to ₹34,510.64 Lakh, Squeezing Margins

The company’s finance costs rose to ₹34,510.64 lakh, up from ₹32,433.93 lakh in the previous quarter, reflecting higher borrowing costs and increased exposure to debt instruments. The spike in financing expenses, combined with net losses of ₹14,003.13 lakh on realised and unrealised securities, contributed significantly to the swing to a net loss, highlighting the sensitivity of PNB Gilts’ earnings to interest rate volatility.

Employee Expenses and Other Costs Fall Sequentially, Limiting Offset

PNB Gilts managed to reduce employee expenses sharply to ₹252.76 lakh, down from ₹1,146.28 lakh in Q1FY26, while other operational costs also declined to ₹278.82 lakh from ₹877.07 lakh sequentially. Despite these cost savings, the reduction was insufficient to offset losses from bond valuations and finance costs, leading to an overall negative impact on profitability.

Primary Dealer Operations Face Pressure From Volatile G-Sec Market

Operating primarily in government securities trading, underwriting, and money market instruments, PNB Gilts continues to act as a primary dealer under the Reserve Bank of India (RBI) framework. The quarter’s performance reflects higher mark-to-market losses due to interest rate fluctuations, putting pressure on margins for trading and investment operations.

Market Reaction: Shares Slide 6.48% Amid Weak Earnings

Shares of PNB Gilts traded at a low of ₹88.79 and a high of ₹92.35 during the session, closing at ₹91.35 by 12:09 p.m. IST, down 6.48% from the previous close. The market capitalisation stands at ₹1,651.59 crore, with a free float of ₹427.58 crore, and a 52-week range of ₹74.25 – ₹129.70, reflecting heightened volatility in the stock following the quarterly results.

PNB Gilts’ Q2FY26 performance underscores the impact of rising finance costs and mark-to-market losses in government securities trading. The results highlight the importance of monitoring bond portfolio valuations, interest rate fluctuations, and risk management strategies in primary dealer operations for future quarterly outcomes.

REF: https://nsearchives.nseindia.com/corporate/PNBGILTSSB_16102025181637_STX.pdf

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