Punjab National Bank share price target

Credit Cost to Remain Elevated; Reiterate HOLD Punjab National Bank (PNB) has delivered a healthy performance in 1QFY18. Its PAT surged by 12.1% YoY and 31.2% QoQ to Rs3.4bn led by lower provisioning expenses (-4.7% YoY & -54.7% QoQ to Rs26.1bn) and higher treasury and exchange income (+47.2% YoY and +0.3% QoQ to Rs10.7bn). Fresh slippages declined to Rs66.5bn in 1QFY18 vs. Rs69bn in 4QFY17 and Rs92.3bn in 1QFY17. On QoQ basis, PNB's loan book dipped by 4.7% owing to 17.8%, 4% and 3.3% QoQ decline in overseas, MSME and large corporate loan book, respectively. However, PNB witnessed...

ICICI Securities Ltd | Retail Equity Research Asset quality pressure continued with fresh slippages at ~| 6018 crore, lower compared to previous quarters. Fall from corporate segment and | 865 crore from RA book added to slippages. GNPA ratio rose ~113 bps QoQ to 13.66%. Led by slippages, restructured assets declined further to | 11051 crore vs. | 11932 crore in Q4FY17 Other income (restated) saw robust growth at 22.7% YoY. There was healthy fee based income growth at 31% YoY. PPP was at | 3217...

The newly appointed MD & CEO (Mr. Sunil Mehta)articulated his strategy of profit maximization through stable business, cost control, and RAROC (risk adjusted return on capital)-based lending.

NII fell to Rs. 3683.52 Cr in Q4FY17 compared to Rs. 3730.8 Cr in Q3FY17.

Current headwinds suggest further pressure on PNB's profitability in the near-term led by the expected haircut on large stressed corporate loans. Thus, we believe that the Bank will continue to witness higher credit cost which will keep its earning profile and return ratio subdued over next 4-6 quarters. Rolling over our estimates to FY19E, we reiterate our HOLD recommendation on the stock with an upwardly revised SOTP-based Target Price of Rs167 (valuing parent at 1x FY19 Adj. BV implying standalone value at of Rs125 and valuing subsidiaries at Rs42...

ICICI Securities Ltd | Retail Equity Research Asset quality pressure continued with fresh slippages at ~| 7400 crore, similar to the run rate seen in previous quarters. However, healthy recoveries/upgrades led to a sequential decline in GNPA at | 55371 crore. GNPA ratio improved ~117 bps QoQ to 12.7%. Led by upgrades in power and road exposure, restructured assets declined further to | 11932 crore vs. | 17219 crore in Q3FY17 PPP was significantly above estimates at | 6232 crore vs. estimate of...

Despite in-line operating profit (up 8.1% YoY), PAT at ~Rs 2.1 bn was below estimates largely due to higher provisions. Advances book de-grew (down 2% YoY) while deposit growth (11.6% YoY) remained healthy on significant SA deposits (37% YoY) in wake of demonetization. LDR at 63% continues to fall, ..

NII fell to Rs. 3730.8 Cr in Q3FY17 compared to Rs. 3879.85 Cr in Q2FY17. NII decreased by 9.44% ( Rs. 388.83 Cr ) when compared with the same period last year.

ICICI Securities Ltd | Retail Equity Research Asset quality pressure was controlled with fresh slippages at ~| 4800 crore vs. | 5089 crore in Q2FY17. GNPA declined marginally QoQ to | 55627 from | 56466 crore. NNPA ratio was stable at 9.09% down to | 34993 crore vs. | 35722 crore QoQ. Restructured assets (RA) of the bank declined further to | 17216 crore in Q3FY17 vs. | 18094 crore in Q2FY17. Stressed book (GNPA + RA) remains high at 18.2% of assets PAT came in below our estimate at | 207 crore (I-direct estimate:...

Topping our estimates, net profit of Punjab National Bank (PNB) grew by 79.3% qoq to Rs5.5bn in 2QFY17 primarily due to relatively higher other income of Rs23.9bn (+76% yoy & 1.4% qoq) and lower provisioning expenses (decline of 7.5% qoq). Other income growth was led by one-time higher treasury profit of Rs6.5bn vs. Rs6bn in 1QFY17 & Rs2.1bn in 2QFY16. Decline in G-sec yield along with higher SLR holding helped PNB to monetize part of its excess SLR in 2QFY17. Provisioning expenses dipped 7.5% qoq to Rs25.3bn led by lower fresh slippages (at Rs62bn vs. Rs92.3bn in 1QFY17) and continued traction on upgrades and recovery. As we believe improved...