PNB share price up 90% in 6 months; Sharekhan recommends buy - check price target

PNB Share Price NSE, BSE Target 2023: Shares of government-owned Punjab National Bank (PNB) on Tuesday, January 3, gained 2 per cent in early morning deals on the back of strong trading volumes and a healthy outlook. The stock opened at Rs 57.45 apiece on NSE and hit the day's high of Rs 58.30 as buying momentum lifted the counter.

The public sector bank's shares have gained 8 per cent in the past 5 sessions and more than 90 per cent in the past 6 months. 

Domestic brokerage firm Sharekhan has maintained a Buy rating on the counter on a strong outlook. It said that the bank is likely to deliver strong earnings driven by healthy pre-provision operating profit (PPOP) growth led by faster loan growth, higher margins and normalisation of credit costs.

The report said that valuations are cheap for PNB as compared to an improvement in return ratio profile expected going ahead, as the bank is likely to deliver strong earnings growth and higher RoA/RoE led by healthy loan growth, margin improvement and lower credit costs.

Sharekhan also said that PNB’s balance sheet has strengthened. It has healthy Current Account Savings Accounts (CASA) share and higher liquidity. It added that the system loan growth is strong at 16-17 per cent while the bank eyes credit growth of 12-14 per cent for FY23E.

"Asset quality outlook remains strong. Lower slippages formation and healthy recoveries likely to improve asset quality further. PPoP growth should improve as loan growth accelerate, and a stable margin outlook," it said.

PNB Share Price NSE Target 2023

Sharekhan in its report said that any correction in the stock provides a good opportunity to add due to an improved business outlook.

It has maintained Buy on PNB with an unchanged price target of Rs 64.

Sharekhan said that PSU banks overall have emerged stronger after the COVID crisis. Going forward for PNB, recovery would exceed new NPA additions and existing trend of strong recoveries would likely sustain.

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