PNB’s strong Q2 results have boosted investor sentiment

Punjab National Bank (PNB) has reported its highest-ever quarterly net profit of ₹5,532 crore in Q2 FY27, up 13% YoY, driving its stock up over 6–8% to a seven-month high. Brokerages are split: CLSA and Motilal Oswal have raised targets to ₹140, while Citi maintains a sell rating. 📊 Key Financial Highlights (Q2 FY27) Net Profit: ₹5,532 crore (↑13% YoY) Net Interest Income (NII): ₹11,601 crore (↑11% YoY) Operating Profit: ₹7,532 crore (↑4.2% YoY) Net Interest Margin (NIM): 2.58% (vs. 2.50% last quarter) Gross NPA Ratio: 2.55% (improved from 2.78%) Net NPA Ratio: 0.25% (vs. 0.28% last quarter) 📈 Market Reaction PNB Share Price: Jumped 6–8% to ₹123–₹125 on NSE/BSE, hitting a seven-month high. Market Cap: ~₹1.41 lakh crore. PSU Bank Index: Up 2% overall, with PNB leading gains. 🏦 Strategic Outlook Profit Target: Management aims to reach ₹6,000 crore quarterly profit in coming quarters. Core Operating Profit: Grew ~29% YoY, showing strength beyond treasury gains. Loan Growth: Retail loans ↑16% MSME advances ↑19–20% Agriculture lending ↑18% Treasury Losses: Absorbed ~₹1,000 crore decline in treasury income but still maintained profit growth. 📌 Brokerage Views Brokerage Rating Target Price Notes CLSA Accumulate ₹140 Raised from ₹135, citing asset quality improvement. Motilal Oswal Buy ₹140 Strong quarter, controlled provisions, margin expansion. Jefferies Buy ₹140–₹150 Profit beat estimates, NIM upside, lower provisions. Elara Capital Buy ₹140 Positive operating performance, RoA >1% guidance. Citi Sell ₹110 Raised target but cautious on long-term outlook. ⚠️ Risks & Considerations Treasury income volatility could impact future quarters. Asset quality improvements are promising, but slippages in corporate accounts remain a watchpoint. Brokerage divergence (Buy vs. Sell ratings) signals uncertainty in long-term valuation.