Why some brokerages have turned positive on Punjab National Bank

Ability to demonstrate better bad loan recovery, price correction key positives

A week after Nomura turned positive on Bank of Baroda (BoB), it is the turn of Punjab National Bank (PNB) to enjoy a rating upgrade from the foreign brokerage. Nomura upped its rating on PNB from “neutral” to “buy”. With a price target of Rs 180, the potential upside was about 26 per cent, even after factoring in for Thursday’s 4.6 per cent rally. 

In a report dated July 5, analysts said after the 24 per cent correction in the past two months, incremental risk-reward was turning favourable for PNB. “Our adjusted book valuation of 0.55x FY19 book factors in