Punjab National Bank jumps 5% on Q2 earnings beat

PNB (PNB) rose 5.19% to ₹122.34 on October 19, the first session after it reported a 12.8% year-on-year rise in Q2 FY27 net profit to ₹5,532 crore. The results were released after market hours on Friday, October 16. Net interest income grew 10.8% to ₹11,601 crore, and 7.4% sequentially. Global net interest margin improved to 2.58% from 2.50% in Q1. Domestic NIM of 2.74% beat the bank's 2.6–2.7% guidance. Global advances rose 14.7%, ahead of the 12–13% loan growth guidance. Gross NPA fell to 2.55%, and return on equity stood at 17.32%. The beat was meaningful. One brokerage said profit came in 20% above its estimate. Core operating profit rose 29.4%, and now makes up 79% of total operating profit, compared with 64% a year ago. That shows earnings are coming more from the core lending business. Motilal Oswal kept its Buy rating with a revised target of ₹140. Part of the beat is less repeatable. The same brokerage said one-off recoveries helped push profit above estimates. Total operating profit grew only 4.2% to ₹7,532 crore. Fresh slippages also increased during the quarter, even as overall NPA ratios improved. Return on assets stayed flat at 1.05% compared with a year ago. The bank also faces a transition to the expected credit loss (ECL) provisioning model. Investors should watch NIM sustainability, fresh slippages, the impact of ECL provisioning, and whether loan growth stays above guidance. The key question is whether PNB can keep growing profit once one-off recoveries fade.