Total income for the quarter rose 15.7% YoY to Rs 37,232 crore, compared to Rs 32,166 crore a year ago. However, net interest income (NII) remained largely flat, rising just 1% to Rs 10,578 crore.
The sharp drop in profitability was mainly due to a one-time tax expense of Rs 5,083.3 crore, significantly higher than Rs 2,017 crore in the year-ago period. On a consolidated basis, net profit fell 52% YoY to Rs 1,832 crore.
Asset Quality Sees Improvement
PNB reported modest improvement in asset quality. Gross non-performing assets (GNPA) stood at 3.78% at the end of June, compared to 3.95% in March and 5.73% in June 2024. Gross NPAs in absolute terms fell to Rs 42,673 crore, down by over Rs 8,500 crore from the previous year.
Net NPAs declined to Rs 4,132 crore, with the ratio improving to 0.38% from 0.60% a year earlier and 0.40% in March.
Growth in Deposits and Advances
The bank saw growth in both savings and current deposits. Savings deposits rose 2.8% YoY to Rs 4,97,981 crore, while current deposits increased 9.2% to Rs 70,656 crore.
Should you buy, sell, or hold PNB’s stock? Here’s what brokerages say:
Antique
Antique Stock Broking has retained a ‘Hold’ rating on PNB with a target price of Rs 123, slightly above the current market price of Rs 110.
The brokerage said operational performance was in line with expectations, though profitability was hit by the tax adjustment. While loan growth slowed overall, the MSME portfolio saw healthy expansion. Slippages declined sequentially, and credit costs remained under control. Antique expects RoA to range between 0.8% and 1.0% and RoE between 12% and 14.5% for FY26–28E. Key upside risks include stronger-than-expected credit growth, while downside risks stem from potential slippages in the MSME and retail segments.
Motilal Oswal
has maintained a ‘Buy’ rating on PNB with a higher target price of Rs 125.
The brokerage noted that NII came in below estimates due to weaker Net Interest Margins and higher slippages. However, business growth guidance remains steady, and the credit-to-deposit ratio is healthy at around 69%. Motilal Oswal has kept its EPS estimates unchanged and expects RoA and RoE to improve to 1.05% and 15.5%, respectively, by FY27.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
