PNB shares jump 8% after Q2 results beat estimates; Jefferies, Motilal Oswal, others raise target prices

ETMarkets.com

PNB's net interest income (NII) rose around 11% YoY to Rs 11,601 crore in Q2 FY27.

PNB on Friday reported a standalone net profit of Rs 5,532 crore for the July-September quarter of the ongoing financial year 2027, marking around a 13% year-on-year increase from the Rs 4,904 crore net profit reported in the corresponding quarter of the previous financial year.

The public lender’s net interest income (NII), which is the difference between interest earned and interest expended, rose around 11% YoY to Rs 11,601 crore in Q2 FY27, from Rs 10,469 crore in the year-ago period. Asset quality improved with gross non performing assets (GNPA) ratio dropping 90 basis points to 2.55% and net NPA ratio falling 11 bps to 0.25% during the quarter under review.

The company’s operating profit increased 4% YoY to Rs 7,532 crore, while return on assets (RoA) stood at 1.05%.

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Jefferies on PNB share price

Jefferies has a ‘Buy’ call on the shares of PNB, and increased its target price to Rs 140 apiece, implying more than 20% upside potential from the stock’s previous closing price of Rs 116 apiece on NSE.

The international brokerage noted that the company’s profit was ahead of estimates with better NII, higher treasury & lower provisions, that offset higher opex. Key positive was rise in NIMs, reflecting improving quality of deposits (lower share of bulk-deposits) & loans (lower share of IBPC). Asset quality trends are stable with high coverage. “We raise estimates for better NIMs given the rate hikes,” it added.

Motilal Oswal on PNB share price

Motilal Oswal also maintained its ‘Buy’ rating on the shares of PNB, and increased its target price to Rs 140 apiece. It also raised its earnings estimates for the lender.

The domestic brokerage also noted that the company’s net profit was higher than its estimates, driven by lower provisions and other income. “PNB reported a strong quarter, with earnings beat led by controlled provisions and opex, while margins expanded 8bp QoQ. Provisions came in lower, reflecting strong asset quality, even as they created additional standard asset provisions to facilitate a smoother transition to ECL. Asset quality trends remained healthy, with marginal uptick in slippages driven by a single infrastructure corporate account and no significant stress elsewhere in the portfolio. Management guided for RoA of >1% and credit cost of 0.25–0.30%,” it said.

JM Financial on PNB share price

JM Financial upgraded its rating on the shares of PNB to ‘Buy’ from ‘Add’, and raised its target price to Rs 140 apiece, from Rs 120 apiece. The domestic brokerage noted that the company reported a robust quarter with the highest ever RoA of 1.09% and PAT growth of 13% YoY, beating its estimate by 8%. This is driven by NIM expansion, 24% YoY fee income growth and negligible credit cost (just 3 bps).

Sequential NIM expansion was supported by lower funding costs, phasing out of low-yielding IBPC/corporate exposures and balance sheet optimisation. Loan growth remained healthy at 16% YoY as advances mix continued to shift towards RAM. Management reiterated confidence in further margin improvement of 7–9bps in coming quarters, led by repricing repo rate-linked book and stable cost of fund, the brokerage noted.

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