Punjab National Bank Shares Surge 6% on Q1FY27 Net Profit Jump

Punjab National Bank shares rose sharply on Monday after the PSU lender reported a 214% YoY jump in Q1FY27 net profit, beating Street estimates. Strong asset quality, lower provisions and improving margins prompted JM Financial to upgrade the stock and Motilal Oswal to reiterate its Buy rating with a higher target.

Shares of Punjab National Bank (PNB) jumped nearly 6% on Monday after the public lender reported a 214% YoY surge in Q1FY27 net profit to Rs 5,253 crore, prompting brokerages to raise their ratings and target prices.

PNB shares surged to Rs 111.68 apiece, the highest level seen by the stock since early May this year. The bank on Saturday released its Q1 results, showing a 2% YoY rise in net interest income (NII) to Rs 10,798 crore.

PNB’s current account savings account deposits increased around 8% YoY to Rs 5.69 lakh crore, while total term deposits increased 9% YoY to Rs 10.21 lakh crore. Global advances, meanwhile, grew around 13% YoY to Rs 12.73 lakh crore.

The PSU lender’s return on assets (RoA) increased to 1.04% in Q1 FY27 from 0.37% in Q1 FY26, but decreased from Rs 1.06% in Q4 FY26. Return on Equity (RoE) meanwhile stood at 17.33% during the quarter under review.

PNB’s asset quality improved, with gross non-performing assets (NPAs) declining to 2.78% at the end of the June quarter, from 3.78% a year ago. Gross Non-Performing Assets (GNPA) in absolute terms declined by Rs 7,292 crore to Rs 35,381 crore from Rs 42,673 crore, while Net Non-Performing Assets (NNPA) eased by Rs 699 crore to Rs 3,433 crore from Rs 4,132 crore as on June 2025. Similarly, net NPAs, or bad loans, declined to 0.26%, as against 0.38% in the year-ago period.

JM Financial on PNB share price

JM Financial upgraded its rating on the shares of PNB to ‘Add’ from ‘Reduce’, and increased its target price to Rs 120 apiece from Rs 110 apiece. The latest target price implies more than 9% upside potential.

The domestic brokerage noted that PNB reported a healthy Q1 FY27 earnings print with PAT rising 214% YoY, beating its estimate by 17%, driven by improving core operating performance and continued strengthening in asset quality. NII grew 2% YoY as NIM expanded 6 bps QoQ, supported by lower funding costs and continued run-down of low-yielding IBPC and corporate exposures, it said.

Loan growth remained healthy despite balance-sheet re-pricing, while management reiterated confidence in further margin improvement through FY27, aided by FCNR mobilisation and continued repricing of liabilities, JM Financial said, adding that asset quality remained resilient.

“Given improving core profitability, resilient asset quality and FCNR mobilisation providing incremental support to funding, downside looks limited at ~0.8xFY28 P/BV. Accordingly, we raise our FY27E/FY28E EPS estimates by 18%/15%,” it said.

Motilal Oswal on PNB share price

Motilal Oswal Financial Services said PNB reported a mixed quarter, with earnings beat led by controlled provisions and opex, while margins improved 3 bps QoQ. Provisions came in lower, reflecting strong asset quality, while opex was lower due to fewer AS-15 provisions and a decline in PSLC costs.

The domestic brokerage noted that PNB’s business growth remained modest, and management guided for loan growth of nearly 12-13% in FY27. Asset quality trends were healthy, with slippages showing a dip with no significant stress. It reiterated its ‘Buy’ call on the stock with a target price of Rs 135, implying a 28% upside potential.