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PNB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | PNB | Market Cap | 1,39,732 Cr. | Current Price | 122 ₹ | High / Low | 135 ₹ |
| Stock P/E | 8.60 | Book Value | 124 ₹ | Dividend Yield | 2.39 % | ROCE | 6.30 % |
| ROE | 14.2 % | Face Value | 2.00 ₹ | DMA 50 | 122 ₹ | DMA 200 | 114 ₹ |
| Chg in FII Hold | 0.26 % | Chg in DII Hold | 0.55 % | PAT Qtr | 5,100 Cr. | PAT Prev Qtr | 4,904 Cr. |
| RSI | 45.4 | MACD | 0.35 | Volume | 1,98,04,247 | Avg Vol 1Wk | 2,01,45,082 |
| Low price | 85.5 ₹ | High price | 135 ₹ | PEG Ratio | 0.12 | Debt to equity | 12.3 |
| 52w Index | 72.7 % | Qtr Profit Var | 13.1 % | EPS | 14.1 ₹ | Industry PE | 7.64 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹5,100 Cr, up from ₹4,904 Cr, showing steady growth. EPS at ₹14.1 indicates moderate earnings power.
- Margins: ROE at 14.2% is healthy, while ROCE at 6.30% reflects modest efficiency.
- Debt Ratios: Debt-to-equity at 12.3 is very high, typical for banks but still a structural risk.
- Cash Flows: Strong operating cash flows supported by consistent profitability, though leverage remains a concern.
💹 Valuation Indicators
- P/E Ratio: 8.60, slightly above industry average of 7.64, suggesting fair valuation.
- P/B Ratio: Current price ₹122 vs. book value ₹124 → ~0.98x, indicating undervaluation relative to assets.
- PEG Ratio: 0.12, very attractive, showing strong growth potential relative to valuation.
- Intrinsic Value: Appears undervalued compared to fundamentals, offering margin of safety.
🏢 Business Model & Competitive Advantage
- Punjab National Bank (PNB) is a leading public sector bank with a wide branch network and strong retail presence.
- Competitive advantage lies in government backing, large customer base, and improving profitability.
- Business model is stable but highly dependent on credit quality and regulatory environment.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹110 – ₹118, near DMA200 and support levels.
- Long-Term Holding: Suitable for long-term investors seeking value and dividend income, though high leverage and asset quality risks must be monitored.
✅ Positive
- Strong quarterly PAT growth (₹4,904 Cr → ₹5,100 Cr).
- ROE at 14.2% reflects solid shareholder returns.
- Dividend yield of 2.39% provides steady income.
⚠️ Limitation
- High debt-to-equity ratio (12.3) increases financial risk.
- ROCE at 6.30% indicates modest efficiency.
- Valuation premium on P/E compared to industry average.
📉 Company Negative News
- High leverage remains a structural concern.
- Asset quality risks typical for PSU banks.
📈 Company Positive News
- Quarterly PAT growth of 13.1% shows improving profitability.
- FII holding increased (+0.26%) and DII holding increased (+0.55%), reflecting institutional confidence.
- Strong 52-week performance with 72.7% gain.
🏭 Industry
- Banking sector trades at industry PE of 7.64, slightly below PNB’s 8.60, showing fair valuation.
- Sector growth supported by credit expansion and government reforms, though asset quality remains a challenge.
🔎 Conclusion
- PNB offers strong earnings growth, attractive dividend yield, and undervaluation on P/B basis.
- High leverage and asset quality risks remain key limitations.
- Best suited for long-term investors seeking value and income, with entry around ₹110 – ₹118 offering a good margin of safety.
I can also prepare a comparative HTML snapshot of PNB versus SBI to highlight how PSU banks differ in valuation, profitability, and risk.