Jun Qtr: Earnings Ahead; Core Loan Growth Better Than Report Growth; Buy

Research evidence excerpt

Jun Qtr: Earnings Ahead; Core Loan Growth Better Than Report Growth; Buy

India | Banks

Punjab National Bank EquityJulyResearch20, 2026

ESTIMATE CHANGEJun Qtr: Earnings Ahead; Core Loan Growth

RATING BUYBetter Than Report Growth; Buy

PRICE INR106.10^

For Jun qtr, PNB's profit of Rs53bn (+214% YoY on low base) was ahead of

est with lower opex & credit costs. Loan growth (net) of 14% is below sector PRICE TARGET | % TO PT INR130 | +23%

growth, but adjusted for reduction in low margin loan-buyouts it grew by 52W HIGH-LOW INR135.15 - INR98.50

15% YoY. NIMs are stabilising now (up 3bps QoQ), which should improve FLOAT (%) | ADV MM (USD) 31.2% | 2,030.38

NII growth from 2HFY27. Asset quality is stable with credit costs of 0.3% MARKET CAP INR1.2T | $12.1B

of avg loans. We raise earnings by 3-7% and valuations reasonable at 0.8x TICKER PNB IN ^Prior trading day's closing price unless otherwise

FY27 adj PB. BUY stays. noted.

Core loan growth better than reported loan growth; LDR headroom reasonable. PNB's loan FY (Mar) CHANGE TO JEFe JEF vs CONS

growth (net) of 14% YoY is softer than sector's growth of 18%, but underlying trends are margin 2027 2028 2027 2028

accretive as the bank is reducing dependence on buyout of loans. Adjusted for buyouts, loan REV -1% -2% NA NA

growth was at 15% YoY with healthy growth in corporate, retail and MSME segments. Deposits

EPS +7% +5% NA NA

grew by 9% YoY with Casa growth of 8% and bank's LDR of 72% and LCR still has headroom to

be utilised. With this, bank reported slight expansion in NIMs and NII growth of 2% YoY. This

2027 (INR) Q1 Q2 Q3 Q4 FY

coupled with fee growth of 4% and opex fall of 13%, PPOP (ex-treasury) rose by 22% YoY and

EPS -- -- -- -- 15.38

was slightly lower than estimtes.

PREV 14.36