Home / Markets / Stock Markets /  PNB hits fresh 52-week high: Vaishali Parekh gives' buy' tag to the banking stock

Government-owned Punjab National Bank (PNB) on Tuesday witnessed a bull run with the stock hitting a fresh 52-week high. In early deals, the banking stock zoomed more than 4%. Based on the technical view, Prabhudas Lilladher's Vaishali Parekh suggests buying PNB shares as a decisive breach above 57 level would anticipate further upside.

At the time of writing, PNB shares were trading at 56 apiece up by 1.63% on BSE. The stock touched a new 52-week high of 57.40 apiece earlier today. The bank's market cap is around 61,662 crore. Year-to-date, the stock has skyrocketed by nearly 34%.

On Tuesday, Prabhudas Lilladher's Vice President - Technical Research, Vaishali Parekh said, "PNB has moved nearly 12% since our last analysis and is now approaching the first resistance level. A decisive breach above 57 would anticipate for fresh further upside movement till 80 and 100 levels. Any pullback or retest of breakout levels will be a good buying opportunity. We suggest to buy and accumulate this stock."

Recently, PNB issued and allotted Basel III compliant Tier-II capital bonds at a coupon rate of 7.89% per annum -- aggregating to 4,000 crore on a private placement basis.

Year-to-date, the stock has skyrocketed by nearly 34%.
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Year-to-date, the stock has skyrocketed by nearly 34%. (Prabhudas Lilladher chart)

Last month, PNB received approval for divestment of the bank's entire/part stake in UTI Asset Management Company in single or multiple tranches. The divestment will be done for realisation of gain on investment. The timeline, percentage of shareholding for divestment, and value of divestment are yet to be finalised.

In Q2FY23, PNB posted a 63% decline in net profit to 411.3 crore compared to a profit of 1,105.2 crore in the same quarter last year. Net interest income (NII), however, jumped by 30.2% to 8,271 crore in Q2FY23 versus 6,352.8 crore in Q2 of FY22. The bank's provisions for bad loans climbed to 3,555.98 crore as against 2,692.74 crore a year ago-quarter. While its gross non-performing assets (NPAs) declined to 10.48% of the gross advances from 13.36% in Q2FY22.

Currently, PNB's earnings per share are 1.86, while its price-to-equity ratio is 1.86 times. Its return on equity (RoE) is 2.07%.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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