Gradual recovery in asset quality; Upgrade to NEUTRAL Punjab National Bank's (PNB) 2Q net profit stood higher than our and street estimates led by the lower slippages along with significant improvement in NII, recovery from written-off account and treasury income. Fresh slippages declined sequentially to Rs26.1bn (slippage ratio of 2.7%) v/s Rs33.7bn (slippage ratio of 3.6%) in 1QFY16 and Rs36.2bn (slippage ratio of 4.2%) in 2QFY15. PNB is gradually showing improvement on asset quality front and hence we upgrade to NEUTRAL from SELL on the stock...