Psu Bank

Punjab National Bank shares surged 5.6% to ₹111.70, driven by a 214% net profit increase to ₹5,253 crore for Q1FY27, supported by stronger operations and improved asset quality, reflecting a favorable earnings outlook.

Among ETFs tracking the Nifty PSU Bank Index, Nippon India ETF Nifty PSU Bank BeES is the biggest fund with assets under management (AUM) of ₹4,078 crore. It is followed by Kotak Nifty PSU Bank ETF, while DSP Nifty PSU Bank ETF is the third biggest fund in the category.

Nomura warns that higher leverage poses risks for PSU banks, which operate with 12-17 times leverage compared to 6-9 times for private banks. Despite recent gains, concerns over credit costs and deposit growth may affect future profitability and investor preference.

PSU banks have underperformed their private sector peers, consistent with trends observed during previous market corrections. The Nifty PSU Bank index has dropped 16%, while the Nifty Private Bank index has declined 14.5% over the past month.

Canara Bank is recommended for purchase at ₹137.30, with a potential upside to ₹151/158. The key support level is ₹125, and the stock has shown a bullish breakout pattern, attracting investor interest in the PSU banking sector.

The Nifty PSU Bank index rose nearly 4% on March 20, reversing a previous 3% decline. Broader market gains and easing crude oil prices boosted sentiment. Key banks like Canara Bank and Union Bank saw significant increases, with all constituents trading positively.

In the post-budget rally, the Nifty PSU Bank Index finished higher for the third straight week

Amid market volatility, the Nifty PSU Bank index rose 5.45% this week, reaching record highs. This growth reflects strong investor confidence, driven by solid earnings and a government spending push.

Nandish Shah favors SBI and Indian Bank for their strong performance, healthy credit growth, and improved asset quality. SBI's NIM is projected at 3%+ in FY26, while Indian Bank shows steady margins. Both banks have raised earnings estimates for FY27 and FY28, indicating a positive outlook.

PSU banking stocks surged for the third consecutive session, with the Nifty PSU Bank index reaching a record high of 9,647. All 12 index constituents gained, led by Punjab National Bank. Strong earnings and credit growth underpinned the rally despite earlier market concerns over borrowing plans.