PNB shares rise 2% after Q2FY26 profit climbs 14% YoY. Brokerage raises target price to Rs 122

Synopsis

Shares of Punjab National Bank gained 1.7% after the lender posted a 14% year-on-year rise in profit after tax for Q2FY26, supported by improved asset quality and steady business growth. Despite a slight dip in net interest income, operating profit and key financial ratios strengthened, with GNPA and NNPA levels improving and the Provision Coverage Ratio rising.

Shares of Punjab National Bank (PNB) climbed 1.7% to touch the day’s high of Rs 115.7 on the BSE on Monday, following the public sector lender’s announcement of a 14% year-on-year (YoY) increase in its profit after tax (PAT) for the quarter ended September 30, 2025. The PAT stood at Rs 4,904 crore, up from Rs 4,290 crore in the same period last year.

However, the bank’s net interest income (NII) fell marginally by 0.45% YoY to Rs 10,469 crore, down from Rs 10,517 crore. The global Net Interest Margin (NIM) for the first half of FY26 stood at 2.65%, while for Q2FY26, it was at 2.60%.

PNB reported an operating profit of Rs 7,227 crore for Q2FY26 and Rs 14,308 crore for the first half (H1FY26), reflecting YoY growth of 5.5% and 6.5%, respectively.

On the asset quality front, the Gross Non-Performing Assets (GNPA) ratio improved, falling by 103 basis points YoY to 3.45% as of September 2025. The Net NPA (NNPA) ratio declined 10 basis points to 0.36%, while the Provision Coverage Ratio (PCR), including technical write-offs, rose by 24 basis points to 96.91%.

Return on Assets (RoA) increased slightly to 1.05% in Q2FY26 from 1.02% a year earlier. The bank’s gross global business rose by 10.6% YoY to Rs 27,86,673 crore. Global deposits grew 10.9% YoY to Rs 16,17,080 crore, while global advances were up 10.1% YoY to Rs 11,69,592 crore. Advances in the Retail, Agriculture, and MSME (RAM) segments rose 12.7% to Rs 6,35,417 crore from Rs 5,64,049 crore in the year-ago period.

Brokerage view

Brokerage Elara Capital maintained an ‘Accumulate’ rating on PNB with a revised higher target price of Rs 122. It stated that while asset quality remains steady, the trajectory for FY26 will need close monitoring. Elara also noted that PNB’s core performance remains stable but pointed out that limited growth levers continue to be a concern.

Also read: RIL shares surge 3% as Q2 profit rises 10% YoY. Should you buy, sell or hold?

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