PNB shares upgraded to 'Add' at JM Financial; check outlook, target here

JM Financial upgraded the stock to 'Add' and set a target price of ₹125 per share, a potential upside of 6.2 per cent from Tuesday's closing price

Shares of Punjab National Bank (PNB) rose over 2 per cent while it received a rating upgrade to 'Add' from JM Financial after the lender delivered a strong September quarter. 

 

The domestic brokerage set a target price of ₹125 per share from ₹105 apiece earlier, a potential upside of 6.2 per cent from Tuesday's closing price. 

 

The state-owned lender reported a 14 per cent rise in standalone net profit at ₹4,904 crore for the September quarter financial year 2026 (FY26). It had logged a profit of ₹4,303 crore in the year-ago period. 

 

Operating profit in July-September was at ₹7,227 crore and ₹14,308 crore in April-September (H1) FY26, recording a growth of 5.46 per cent and 6.51 per cent, respectively, on a year-on-year (Y-o-Y) basis. Total income in the second quarter was at ₹36,214 crore and ₹73,445 crore in H1FY26, clocking a Y-o-Y growth of 5.1 per cent and 10.3 per cent, respectively.

 

 

According to JM Financial, PNB delivered a strong quarter, with profit rising slightly above the brokerage's estimates by 8 per cent. The performance was driven by steady loan growth, improving asset quality, and sustained operating efficiencies, with operating expenses and credit costs lower than expected.  ALSO READ | What fuelled 16% rally in Gulshan Polyols shares today? Find out inside 

Asset quality strengthened, aided by ₹1200 crore from account upgradation. Net slippages were -0.27 per cent versus 0.08 per cent in Q1, with full provision write-back expected in the third and fourth quarters. PNB's capital position remains robust, with Tier 1 at 14.4 per cent and CAR at 17.2 per cent. 

 

JM Financial projects loan and deposit CAGRs of 13 per cent and 12 per cent, respectively, over FY25-28, with average return on asset (ROA)/return on equity (ROE) of approximately 0.8 per cent and 12 per cent for FY26-28.

 

The lender is witnessing strong momentum across retail, micro, small and medium enterprise (MSME), and corporate loan segments, driven by robust demand in the auto and housing sectors, Ashok Chandra, managing director and chief executive officer, said. The bank is also expanding digital offerings, growing its credit card base, and re-entering the West Asian market with plans to reopen its Dubai office, he said. 

 

The bank said its savings deposits increased to ₹5,08,964 crore, registering a Y-o-Y growth of 4.2 per cent, while current deposits increased to ₹74,215 crore, an increase of 9 per cent.  ALSO READ | Jain Resource Recycling share zooms 9%, hits record high on strong Q2 show

PNB share price history

The company's stock rose as much as 2.1 per cent during the day to ₹120.2 per share, the highest level since August 2, 2024. The stock pared gains to trade 1.7 per cent higher at ₹119.7 apiece, compared to a 0.75 per cent advance in Nifty 50 as of 11:05 AM. 

 

PNB shares have risen 38 per cent from their lows in March this year. The counter has fallen 16.4 per cent this year, compared to a 10.3 per cent advance in the benchmark Nifty 50. PNB has a total market capitalisation of ₹1.37 trillion.