Punjab National Bank Shares Jump 5% After Q1 Profit Triples

Mumbai, July 20: Punjab National Bank (PNB) share price climbed as much as 5% on Monday after the state-owned lender reported a more than three-fold jump in June-quarter profit, beating Street estimates. Strong earnings, improving asset quality and healthy loan growth prompted several brokerages to reiterate their bullish stance on the stock, with some forecasting upside of up to 28% from current levels.  

PNB posted a standalone net profit of ₹5,253 crore for the quarter ended June, marking a 214% year-on-year increase and comfortably surpassing analysts’ expectations. The sharp increase in profit was primarily driven by a lower tax outgo following the bank’s transition to the new tax regime. The strong performance was also aided by lower provisions for bad loans, healthy growth in advances and improved operating income. As of writing the stock was up 5.5% at Rs 111.63. 

Asset Quality Improves 

The lender’s asset quality strengthened during the quarter. Gross non-performing assets (GNPA) declined, while the net NPA ratio also improved, reflecting sustained recoveries and prudent credit management. 

PNB jumped after results as investors cheered the jump in profit. Source: NSE 

Provisions were lower, providing additional comfort on the bank’s balance sheet. 

Loan Growth Remains Healthy 

PNB also reported healthy credit growth. Deposits expand 9% year on year, helping the bank maintain a stable funding base despite intense competition for deposits across the banking sector. 

Management indicated that loan growth momentum is expected to remain healthy through the current financial year.  

Brokerages Turn More Bullish 

The better-than-expected earnings prompted several brokerages to revise their outlook on the stock. 

One broker retained its positive stance, citing improving profitability, declining credit costs and continued balance-sheet strengthening. Another maintained its bullish view, highlighting the bank’s improving return ratios, stronger capital position and steady execution. According to the brokerage estimates, target prices imply an upside potential of as much as 28% from current levels.  

Analysts noted that PNB’s valuation remains attractive compared with peers despite the recent rally, particularly as asset quality concerns have eased significantly over the past few years. 

Stock In Focus 

PNB has emerged as one of the better-performing public-sector banking stocks over the past year, supported by a sharp improvement in earnings, lower stressed assets and sustained credit growth. 

Investors will now monitor whether the lender can maintain its loan growth momentum while preserving asset quality amid a competitive lending environment. Future commentary on net interest margins, deposit mobilisation and credit costs will remain key triggers for the stock. 

With the earnings season gathering pace, the banking sector remains firmly in focus, and PNB’s stronger-than-expected quarterly performance has further reinforced optimism around the improving fundamentals of India’s public-sector banks. 

Source

•  https://www.nseindia.com/get-quote/equity/PNB/Punjab-National-Bank