PSU Bank Reports 307% Jump In Net Profit, LKP Research Recommends Buy With TP Rs 80

Leading public sector bank, Punjab National Bank on Wednesday announced 307% surge in its standalone net profit for the quarter ended June 2023. Meanwhile, brokerage firm LKP Securities has assigned buy call to Punjab National Bank shares with target price of Rs 80 per share in its research report dated July 10, 2023. PNB shares soared 4% intraday to Rs 63.21 per share. If you buy PNB shares, you can get likely return of 27%. Check details below:

Punjab National Bank Q1 Results: The public sector bank declared 307% jump in its net profit to Rs 1255.4 crore as against Rs 308.4 crore in the same quarter last year. Sequentially, the PSB's net profit jumped 8%. PNB declared its asset quality got better during the June quarter. The bank's gross non-performing assets (GNPAs) soared 7.73% as against 8.74% in the preceding quarter and 11.27% in June quarter of last fiscal.

PNB's total income witnessed a surge of 34.2% to Rs 28,579.27 crore for the June quarter as against Rs 21,294.03 crore declared in the same period last year.

The bank stated in its press release, "operating profit was at Rs 5,968 crore during Q1 FY'24 grew by 10.95% on YoY basis. Net Interest Income increased by 26.00% YoY to ₹ 9,504 Crore in Q1 FY24."

Global Business increased by 14.3% on YoY basis to Rs 22,14,741 Crore as on June'23 as against Rs 19,36,924 Crore as on June'22. Global deposits grew by 14.18% on YoY basis to Rs 12,97,905 Crore as on June'23. Global Advances grew by 14.58% on YoY basis to Rs 9,16,836 Crore as on June'23, said PNB.

PNB Stock Performance & Return: Last trading price of PNB share is Rs 63.21 apiece. Its 52-week high price is Rs 65.15 per share and 52-week low price is Rs 31.30 per share, respectively. It has a market capitalisation of Rs 69,600.63 crore. PNB shares jumped 26% in last 1-month, rallied again 26% in last 3-months, soared 100% in last 1-year, gave return of 88% in last 3-years, and fell 22% in last 5-years.

PNB Valuation: According to LKP Research, "We expect the PNB's loan book to fatten cautiously at CAGR of 11% - 12% over FY23-25E, led by retail book growth. In our opinion, the bank's credit cost will normalise further by FY24E and estimate return ratio ROA/ROE of 0.5% and 7.8% in FY25E. We value the standalone entity at 0.7xFY23E BVPS ( ₹105) and value of associates and subsidiaries at ₹7 to arrive at a target price of ₹80. We recommend BUY."

Disclaimer: The stock has been picked from the brokerage report of LKP Research. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.