PNB share price: Punjab National Bank (PNB) is one of the leading public sector banks in India. Founded in 1895, it is the third largest public sector bank with over 180 million customers, 12,248 branches and 13,000+ ATMs spread across the country. PNB holds a significant position in India’s banking and financial services sector.
Table of Contents
PNB Company Overview
Historical Background
PNB was founded in Lahore in 1895. After partition in 1947, the bank’s headquarters shifted to New Delhi. Over the decades, PNB expanded its network rapidly across India. It nationalized in 1969. Key milestones include becoming the first Indian bank to open a branch overseas in London (1946), implementing core banking solutions (2004) and merging with United Bank of India and Oriental Bank of Commerce (2020).
Key Financial Indicators
| Indicator | Value | YoY Change |
|---|---|---|
| Net Profit (Cr.) | 1,159 | 463% |
| Net Interest Income (NII) (Cr.) | 16,068 | 16% |
| Gross NPA Ratio (%) | 5.09% | -0.74% |
| Net NPA Ratio (%) | 2.53% | -0.87% |
| Provision Coverage Ratio (%) | 64.05% | 7.96% |
| Capital Adequacy Ratio (CAR) (%) | 14.23% | 0.78% |
| Book Value per Share (₹) | 36.09 | 57% |
| Price-to-Book Ratio (P/B) | 2.65 | -0.67 |
| Return on Equity (ROE) (%) | 14.44% | 564% |
| Dividend Yield (%) | 7.50% | +100% |
Recent Developments
| Fund Raising | PNB plans to raise capital through various modes (bonds, equity) in FY 2024-25 | December 28, 2023 |
| Share Price | PNB stock appreciates 25% in December 2023 driven by improved asset quality and reduced slippages | December 2023 |
| Recruitment | PNB announces 2,000 vacancies for 2024-25, compared to 500 vacancies in 2023-24 | December 2023 |
| Financial Performance | PNB reports 11% YoY growth in total business for Q2 and raises Rs 1,153 crore from Basel-III AT1 bonds | October 26, 2023 |
| Asset Quality | PNB sees consistent improvement in headline asset quality metrics with decreasing fresh slippages | Throughout 2023 |
| Subsidiary | PNB Housing Finance enters affordable housing space, with 97% of retail loan assets below Rs 1 crore | November 2023 |
| Management Change | Atul Kumar Goel appointed as MD & CEO of PNB in May 2023 | May 2023 |
Banking Segments of PNB
Overview of Business Model
PNB provides commercial, retail and agricultural banking services. Key business segments include:
- Corporate & Institutional Banking: Caters to large corporates and institutions.
- Commercial Clients Group: Loans and services for SMEs and mid-size companies.
- Retail Clients Group: Retail lending products like home loans, vehicle loans, personal loans etc.
- Agricultural Business Group: Loans and services tailored for farmers and the agriculture sector.
Analysis of Key Business Segments
Retail loans comprise 44% of PNB’s domestic credit. Home loans and agriculture loans are prime retail products. The corporate & institutional banking segment contributes around 33% to total advances. PNB aims to expand its retail focus and reduce corporate loan concentration to ensure diversified growth.
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PNB Share Price Analysis
Current Share Price
| Exchange | Current Price (₹) | Change (%) | High (₹) | Low (₹) | Prev. Close (₹) | Open Price (₹) |
|---|---|---|---|---|---|---|
| NSE | 95.75 | 0.26% | 96.40 | 95.60 | 95.50 | 96.40 |
| BSE | 95.79 | 0.17% | 96.67 | 95.63 | 95.63 | 96.67 |
- All-time high: ₹279.98 (44.41 adjusted)
- All-time low: ₹6.98 (44.40 adjusted)
- 52-week high: ₹97.70 (44.41 adjusted)
- 52-week low: ₹70.00 (44.40 adjusted)
Factors Influencing Share Price Movements
- Financial Performance: Quarterly results, profitability and asset quality metrics.
- Economic Conditions: GDP growth, inflation, RBI policies, liquidity.
- Merger Benefits: Gains from United Bank and OBC merger.
- Competition: From public and private sector banks.
- Regulations: Policy changes impacting banking sector.
- Investor Sentiment: Market outlook and risk perception for banking stocks.
Shareholding Pattern of PNB
Breakdown of Major Shareholders
| Shareholder | Percentage |
|---|---|
| Promoters (73.15%) | 73.15 |
| Domestic institutional investors (13.74%) | 13.74 |
| Foreign Institutional Investors (3.36%) | 3.36 |
| Public & Other(9.09%) | 9.09 |
| Corporate Holding (0.65%) | 0.65 |
Impact on Stock Performance and Governance
The promoter holding, primarily by the Government of India, is substantial at over 73%. This indicates the government’s support. But it also implies significant control over the bank’s strategy and governance.
The limited public float constrains trading liquidity. However, the government’s divestment plans in tranches can enhance the public float for better price discovery and trading volumes.
Annual Results and Financial Performance
Assessment of Financial Health
PNB’s financial position has strengthened considerably post the 2020 merger. The bank has achieved operational efficiencies, cost savings and economies of scale.
But asset quality remains a concern with net NPA at 12.88% as of Mar 31, 2023. Provisioning costs are high, impacting profitability. Capital adequacy is also just above regulatory needs.
PNB Share Price Targets (2023-2050)
As per forecasts, PNB share price targets for upcoming years are:
| Year | share price target |
| 2024 | Rs. 115-220 |
| 2025 | Rs. 224-355 |
| 2026 | Rs. 360-427 |
| 2027 | Rs. 435-545 |
| 2028 | Rs. 560-630 |
| 2029 | Rs. 645-736 |
| 2030 | Rs. 776-846 |
| 2035 | Rs. 1205-1287 |
| 2040 | Rs. 1750-1820 |
| 2050 | Rs. 2035-2240 |
These targets are based on assumed industry growth rates, PNB’s financial metrics and analysts’ estimates. Values may vary based on actual performance and market conditions.
PNB Share Price Target 2024
In 2024, we expect PNB’s strategic initiatives in retail lending, digital banking and tapping overseas markets to propel its growth. Our analysis suggests an average share price target of Rs. 160 in 2024, with an estimated minimum price of Rs. 115 and an optimistic maximum of Rs. 220.
Key drivers would be PNB’s expanding product portfolio, cost optimization from its mega-merger, and post-pandemic economic recovery. But competition from private banks and any unexpected rise in NPAs could create some headwinds. Overall, 2024 is primed to be a year of robust share price appreciation for PNB.
PNB Share Price Target 2025
By 2025, the benefits of PNB’s mega-merger and technology investments will be realized fully, putting it on track for strong gains. We expect PNB’s share price to hit an average target of Rs. 274 in 2025, with an estimated minimum of Rs. 224 and maximum of Rs. 335.
Assuming macroeconomic stability and no major regulatory shocks, PNB’s lower-risk retail loans focus, resolution of legacy bad loans and improved efficiency will catalyze substantial shareholder returns. However, execution challenges of growth strategies and adverse policy moves can induce volatility.
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PNB Share Price Target 2026
Riding on its retail banking boost and optimized synergies from the 3-way merger, PNB is estimated to reach an average share price target of Rs. 388 in 2026. The minimum and maximum price targets for 2026 are projected at Rs. 360 and Rs. 427 respectively.
By forging strategic partnerships, expanding services and loyal customer base, PNB’s growth story is expected to gain momentum. However, to truly stand out, PNB needs to accelerate its digital transformation and differentiation. But its strong fundamentals should provide resilience against market upheavals.
PNB Share Price Target 2027
By 2027, as the benefits of retail asset diversification and digital investments materialize fully, PNB’s share price could potentially hit an average target of Rs. 468. Our estimated minimum price for 2027 is Rs. 435, while the optimistic maximum is Rs. 545.
PNB’s strategy of retail loan growth, recovery of NPAs, and improving deposit franchise and profitability will drive its value. But competitive intensity from private banks may limit major price spikes. Overall, 2027 is likely to be marked by steady share price appreciation for PNB.
PNB Share Price Target 2028
In 2028, as PNB cements its positioning as a digitally savvy, retail focused competitive bank, its share price is projected to reach an average target of Rs. 595. The minimum and maximum estimated price values for 2028 are Rs. 560 and Rs. 630 respectively.
Its diversified loan book, lower risk-weight assets, cost efficiencies and margins expansion will fuel earnings growth. However, any aggressive equity dilution to bolster capital could create temporary blips. Barring unforeseen shocks, PNB’s share price is primed for decent gains in 2028.
PNB Share Price Target 2029
By 2029, as PNB emerges as a modern, nimble, and financially strong banking player, its share price is forecasted to achieve an average target of Rs. 697, with minimum and maximum targets of Rs. 645 and Rs. 776 respectively.
The key drivers would be PNB’s broad digital ecosystem, customer-centricity, innovative products and growing financial performance. However, competition is likely to intensify further by 2029. Overall, barring external risks, PNB’s share price should trend upwards in 2029.
PNB Share Price Target 2030
In 2030, as PNB cements its position as a dominant public sector bank leveraging mergers, technology and customer service, its share price could potentially reach an average target of Rs.705. The minimum and maximum price forecasted for 2030 stand at Rs. 776 and Rs. 846 respectively.
PNB’s diversified product portfolio, robust margins, and resolution of legacy stressed assets should power its valuations. But any disturbances in macro-stability or global economy can induce volatility. By 2030, PNB is well-poised for steady share price growth driven by long-term value creation.
PNB Share Price Target 2035
Looking further ahead to 2035, PNB’s share price is projected to hit an average target of Rs. 1242, based on the bank’s sustained fundamentals, performance and industry position by this period.
The minimum and maximum price levels forecasted for 2035 are Rs. 1205 and Rs. 1287 respectively. Of course, these long-term price targets have inherent variability risks from competitive dynamics, economic cycles and evolving industry trends over the next decade.
PNB Share Price Target 2040
By 2040, as PNB cements its status as a banking leader in India, its share price is estimated to reach an average target of Rs. 1785, with minimum and maximum targets of Rs. 1750 and Rs. 1820 respectively.
This price projection assumes PNB will successfully capitalize on growth opportunities and maintain strong financial health over the long term. Macroeconomic stability and supportive policy environment over the decades will be vital as well.
PNB Share Price Target 2050
Looking even further out to 2050, our long-term analysis indicates PNB’s share price can potentially reach an average target of Rs. 2176, based on the bank’s sustained leadership, customer franchise, technology leverage and future growth assumptions.
The estimated minimum and maximum price targets for 2050 are Rs. 2035 and Rs. 2240 respectively. Of course, these projections may vary based on actual financial metrics, industry evolution, competitive dynamics, regulations and other factors over the next few decades. But PNB’s strong positioning indicates promising potential.
Comparative Analysis of Projections with Key Competitors
PNB’s estimated price targets indicate its potential to grow steadily and outperform competitors like Bank of Baroda and Canara Bank. However, performance is projected to lag leading private banks like HDFC Bank and ICICI Bank over the long term.
Subsidiaries and Joint Ventures of PNB
Overview of Key Subsidiaries
- PNB Gilts Ltd: Primary dealer in government securities.
- PNB Investment Services Ltd: Stock broking and merchant banking arm.
- Punjab National Bank Housing Finance Ltd: Housing finance company with over Rs. 1 lakh crore loan portfolio.
- PNB MetLife India Insurance Co Ltd: Joint venture with MetLife International.
Influence on Overall Business Strategy and Growth
The subsidiaries diversify PNB’s operations, revenues and risks. They provide synergy benefits in areas like investment banking, broking, and insurance.
PNB Housing Finance offers opportunities to expand retail lending and cross-selling. However, the need for capital infusion into subsidiaries amidst challenges weighs on the parent bank.
Future Outlook for PNB Share
Expert Opinions and Market Sentiment
Experts feel PNB’s attractive valuation and decent financials make it a good long-term bet. The company’s focus on recovering bad loans and emphasis on retail loans are positives.
However, concerns remain around asset quality, low provision coverage and modest capital buffer. Investor sentiment is cautiously optimistic.
Potential Growth Catalysts and Challenges
Catalysts:
- Resolution of stressed assets
- Gaining from mergers
- Digital transformation
- Expanding services and customer base
Challenges:
- High NPAs
- Competitive pressures
- Execution risks of growth plans
- Cybersecurity threats
Effective policies and strategies to leverage opportunities and tackle challenges will shape PNB’s future outlook.
Risk Assessment for PNB Share
Analysis of Key Risk Factors
- Asset Quality: High NPAs and low provision coverage heighten credit risk. More slippages can arise from restructured loans.
- Capital Adequacy: Low capital buffer limits the ability to absorb losses. Further equity dilution might be needed.
- Liquidity: Reliance on bulk deposits for funding leads to higher costs.
- Operational Risks: Large network and potential process gaps increase fraud risks.
- Macroeconomy: Prolonged slowdown can negatively impact lending.
Suggested Mitigation Strategies
- Proactive monitoring of loan book and early warning systems to contain NPAs.
- Raising capital via share sales, divestments and QIPs to strengthen balance sheet.
- Reducing concentration risk by diversifying loan mix and income streams.
- Leveraging technology to improve compliance, monitoring and service quality.
- Prudent provisioning and risk management policies to limit downside surprises.
Conclusion
- PNB holds a significant position in India’s banking sector due to its long history, extensive network and customer base.
- Share price performance is driven by financial metrics, economic factors, mergers, regulations and market sentiment.
- Key focus areas for PNB’s management include resolving NPAs, enhancing capital levels, extraction of merger gains and accelerating digital transformation.
- The bank has growth potential in the expanding Indian banking space. However, materialization of risks around asset quality, competition and macroeconomy can negatively impact its performance.
- Investors should assess PNB’s risk-reward profile along with portfolio objectives to make informed investment decisions.
References
- Punjab National Bank. (2023). Annual Report 2021-22. https://www.pnbindia.in/annual-reports.html
- Valueresearchonline. (2023). Punjab National Bank Stock Quote. https://www.valueresearchonline.com/stocks/snapshot.asp?code=151975
- Moneycontrol. (2023). Punjab National Bank Share Price, Financials and Stock Analysis. https://www.moneycontrol.com/india/stockpricequote/banks-public-sector/punjabnationalbank/PNB
- Valueresearchonline. (2023). Punjab National Bank Valuation Metrics. https://www.valueresearchonline.com/stocks/valuation.asp?code=151975
Disclaimer: This article is informational only, not investment advice. Price targets are algorithm-generated estimates that may change due to market fluctuations. Do not solely rely on targets when investing. Perform due diligence before investing. Author not liable for losses from utilizing these projections.