PNB shares notch new 52-week high as Street cheers increase in profit guidance for FY24

Shares of Punjab National Bank (PNB) climbed nearly 5 per cent to notch a fresh 52-week high of Rs 109.48 after Q3 net profit at the state-run lender jumped more than three-fold to Rs 2,223 crore as against Rs 629 crore reported in the same quarter last year.

During the period under review, the total income at the lender also increased to Rs 29,962 crore. The figure stood at Rs 25,722 crore in the same period last year. Interest income at the lender also surged to Rs 27,289 crore as compared to Rs 22,384 crore registered in the third quarter of the previous fiscal.

Additionally, asset quality at the lender improved, with gross non-performing assets (NPAs) declining to 6.24 per cent of the gross loans at the end of December 2023 from 9.76 per cent a year ago.

Similarly, net NPAs or bad loans came down to 0.96 per cent from 3.30 per cent at the end of the third quarter of the previous fiscal.

Furthermore, given the stellar results, the state-run lender raised its profit guidance for the ongoing fiscal year to Rs 7,000–Rs 7500 crore. Earlier, the second-largest lender had set a profit estimate of Rs 6,000 crore for the ongoing fiscal, the PTI report said.

How do global brokerages view PNB post-Q3 FY24?

Jefferies, while maintaining its ‘hold’ call on the stock, raised the target price to Rs 100 from Rs 90. The brokerage is of the view that asset quality at the lender is holding up well.
 
PNB reported steady CASA or current account saving account growth during the quarter, with the retail segment leading loan growth at the bank. Additionally, Jefferies notes that PNB reported healthy growth in net interest income (NII) with lower-than-expected wage hike costs.