PNB Shares Surge 4% Post-Q4 Results Despite Target Price Cuts from Jefferies and Motilal; Insights Revealed.

The shares of Punjab National Bank (PNB) experienced a notable uptick of nearly 4% following the announcement of its fourth-quarter results for FY26, which indicated a 14% increase in net profit to Rs 5,225 crore, up from Rs 4,567 crore year-on-year. Despite a 4% decline in net interest income (NII) to Rs 10,380 crore, brokerages maintained their positive outlooks, albeit with some adjustments to target prices. Key highlights from the results included improved asset quality, with the gross Non-Performing Asset (NPA) ratio decreasing to 2.95% from 3.19% in the previous quarter, and a net NPA ratio of 0.29%, which reflects the bank’s enhanced control over its asset quality.

Brokerages such as Jefferies and Motilal Oswal have expressed a cautiously optimistic stance regarding PNB’s performance. Jefferies has retained its ‘Buy’ rating but adjusted its target price to Rs 130, citing strong profit results attributed to the reversal of retirement benefits and a write-back of provisions, which helped counterbalance weaker NII. The brokerage also highlighted stable deposit growth of 9% year-on-year and projected a 12% CAGR in loans for FY26-29, despite some risks to the guidance related to declining margins. Meanwhile, Motilal Oswal characterized the quarter as mixed, with earnings beat expectations due to controlled provisions and declining operating expenses but a slight uptick in slippages attributed to seasonal factors.

On the other hand, other brokerages like Elara Capital maintained an ‘Accumulate’ rating but lowered their target price to Rs 125, while Emkay also retained its ‘Buy’ recommendation but reduced the target price to Rs 135. They emphasized the underlying volatility in performance trends and the potential recovery rather than core delivery. PNB shares saw fluctuations in the market, closing nearly 1% lower on the day of the results’ release but managed a 16% increase over the past year. From a long-term perspective, PNB’s shares have appreciated significantly, demonstrating a growth of 109% over three years and more than 200% over five years, reflecting a robust performance trajectory.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)