PNB Profit Surges 214% as Bad Loans Shrink, JM Financial Upgrades
Punjab National Bank shares rallied after a 214% surge in first-quarter profit driven by sharply lower bad loans, prompting a notable upgrade from JM Financial.
Punjab National Bank reported a 214% year-on-year jump in first-quarter net profit to Rs 5,253 crore, while net interest income edged up 2%. The earnings beat triggered a 7% rally in the state-owned lender's stock over two trading sessions.
The primary driver behind the results was a sustained cleanup of the balance sheet. Gross non-performing assets fell to 2.78% at the end of the June quarter, down significantly from 3.78% a year earlier.
Improved asset quality translated into stronger profitability metrics. Return on assets expanded to 1.04% from 0.37% in the year-ago quarter, and return on equity reached 17.33%.
On the funding side, the bank saw current account savings account deposits grow roughly 8% year-on-year to Rs 5.69 lakh crore. Total term deposits increased 9% to Rs 10.21 lakh crore.
The numbers were enough to change the narrative for at least one major brokerage. JM Financial upgraded PNB to "Add" from "Reduce" and raised its target price to Rs 120 from Rs 110, indicating more than 7% upside from recent levels.
Other analysts remained more cautious. Motilal Oswal Financial Services described the quarter as "mixed", noting that while earnings beat estimates, this was primarily due to lower provisions and reduced operating expenses tied to fewer AS-15 provisions and declining PSLC costs.
The stock's recent rally adds to a roughly 184% gain over five years, but the year-to-date picture remains negative. PNB shares are still down more than 9% in 2026, giving the bank a market capitalisation of nearly Rs 1.3 lakh crore.
