• Based on technical outlook, Vaishali Parekh of Prabhudas Lilladher suggests buying PNB shares as a decisive breach above ₹57 level would warrant further upside
State-owned Punjab National Bank (PNB) witnessed a rally on Tuesday and the stock hit a 52-week high. In early deals, the banking stock jumped over 4%. Based on a technical outlook, Vaishali Parekh of Prabhudas Lilladher suggests buying PNB shares as a decisive breach above the ₹57 level would warrant further upside.
At the time of writing this news, PNB shares were trading at ₹56 on BSE, up 1.63%. The stock touched a new 52-week high of ₹57.40 earlier today. The market cap of the bank is around ₹61,662 crore. Year-to-date, the stock is up nearly 34%.
On Tuesday, Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "PNB has moved almost 12% since our last analysis and is now approaching the first resistance level. A decisive breach above 57 to 80 Will expect fresh upside move and 100 level. Any pullback or retest of breakout levels will be a good buying opportunity. We suggest to buy and accumulate this stock.
Recently, PNB issued and allotted Basel III compliant Tier-II capital bonds at a coupon rate of 7.89% per annum - aggregating ₹4,000 crore on private placement basis.
Last month, PNB had received approval to sell part or all of the bank's stake in UTI Asset Management Company in one or more tranches. The disinvestment will be done to achieve return on investment. The timeline for disinvestment, percentage of shareholding and value of disinvestment are yet to be finalised.
In Q2FY23, PNB reported a 63% decline in net profit at ₹411.3 crore as compared to a profit of ₹1,105.2 crore in the same quarter last year. Net interest income (NII), however, grew by 30.2% to ₹8,271 crore in Q2FY23 as compared to ₹6,352.8 crore in Q2FY22. The bank's provision for bad loans rose to ₹3,555.98 crore as compared to ₹2,692.74 crore in the year-ago quarter. While its gross non-performing assets (NPAs) declined to 10.48% of gross advances from 13.36% in Q2FY22.
Currently, PNB's earnings per share stands at ₹1.86, while its price-to-equity ratio is 1.86 times. Its Return on Equity (ROE) is 2.07%.
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