PNB - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.2

📊 Fundamental Analysis of Punjab National Bank (PNB)

PNB is a major public sector bank with improving profitability and attractive valuations. Here's how it stacks up

Metric Value Interpretation

ROE 15.2% Strong for a PSU bank

ROCE 6.32% Moderate, typical for banks

PEG Ratio 0.10 Deeply undervalued relative to growth

P/E Ratio 6.80 Very attractive vs industry PE of 7.49

Dividend Yield 2.65% Decent income stream

Debt-to-Equity 12.6 High, but normal for banks due to deposit leverage

EPS ₹16.1 Solid earnings base

Qtr Profit Var +49.3% Strong quarterly growth momentum

📉 Book Value: ₹116 — trading near book, indicating fair valuation 📈 PAT Qtr: ₹4,989 Cr — consistent profitability

📈 Technical & Valuation Insights

Current Price: ₹109

52W High/Low: ₹128 / ₹85.5

DMA 50 / DMA 200: ₹108 / ₹104 — trading slightly above both, indicating mild bullishness

RSI (49.1): Neutral zone

MACD (0.33): Slightly bullish

Volume: Slightly below average, suggesting consolidation

🎯 Ideal Entry Price Zone

Based on valuation and technicals

₹100–₹106: Ideal accumulation zone near 200 DMA and support

₹92–₹98: Deep value zone if broader market corrects or sentiment weakens

Avoid chasing above ₹115 unless there's a breakout with volume.

🧭 Exit Strategy / Holding Period

If you already hold PNB

Holding Period: 3–5 years to benefit from PSU banking reforms, credit growth, and digital transformation

Exit Strategy

Partial Exit: Near ₹125–₹135 if price rallies to 52W high or valuation stretches

Full Exit: If ROE drops below 10% or NPA metrics worsen significantly

Stop-Loss: ₹95 to protect downside

🚀 Long-Term Growth Catalysts

NPA Improvement: Gross NPA down to 3.8%, Net NPA at 0.4%

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Digital Push: Expanding mobile banking and fintech partnerships

Government Support: Capital infusion and policy tailwinds for PSU banks

Undervaluation: PEG of 0.10 and P/E of 6.8 make it a value pick

Dividend Stability: 2.65% yield with consistent payouts

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📈 2030 Target Price: ₹240–₹270 📈 2035 Target Price: ₹400–₹500

⚠️ Risks to Monitor

FII Outflows: -0.19% change in holding

Asset Quality Sensitivity: PSU banks are vulnerable to macro shocks

Leadership Stability: Watch for continuity in strategic execution

Would you like a comparison with peers like Bank of Baroda, Canara Bank, or SBI to assess relative strength and valuation?

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trendlyne.com

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in.tradingview.com

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