Sell Punjab National Bank, target price Rs 33: Emkay Global

Emkay Global has sell call on with a target price of Rs 33. The current market price of Punjab National Bank is Rs 41.75. Time period given by analyst is one year when Punjab National Bank price can reach defined target.

Punjab National Bank, incorporated in the year 1969, is a banking company (having a market cap of Rs 46356.38 Crore).

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 22779.56 Crore, down -3.64 % from last quarter Total Income of Rs 23639.41 Crore and up 35.40 % from last year same quarter Total Income of Rs 16824.20 Crore. The bank reported net profit after tax of Rs 700.80 Crore in latest quarter.
Investment Rationale
The brokerage raises FY22/FY23 earnings estimates by 51%/16%, factoring in a moderation in NPAs/credit cost and transition to a lower tax regime, partly offset by DTA impact. It raises TP to Rs33 from Rs29, mainly factoring in the earnings upgrade and revision in subs/investment value to Rs7 from Rs4. However, it retains Sell/UW in EAP due to continued concerns around the bank’s asset quality and sub-par return ratios among PSBs.

Promoter/FII Holdings
Promoters held 73.2 per cent stake in the company as of March 31, 2021, while FIIs held 5 per cent, DIIs 9.9 per cent and public and others 11.9 per cent.

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