PNB shares more than doubled in a year; what’s next for the state-owned lender?

Shares of Punjab National Bank (PNB) have delivered over 100% returns in the last one year. The stock of state-owned lender, which closed at Rs 34.85 on September 28, 2022 ended at Rs 79.63 on Thursday, clocking 128.49% returns during the period. In comparison, its parent index Bank Nifty managed to climb 17.32% in a year. On the other hand, the wider benchmark Sensex rose 16.13% during the period. 

The stock of public sector bank hit a fresh 52-week high of Rs 82.60 in the previous session. However, it ended 2.32% lower at Rs 79.63 on Thursday. Market cap of the lender fell to Rs 87,680 crore in the previous session. Total 70.24 lakh shares of the firm changed hands amounting to a turnover of Rs 56.90 crore. 

The stock has a beta of 1.6, indicating very high volatility in a year. The banking stock has gained 39.34% this year and climbed 77% in the last six months.  

Vaishali Parekh, AVP- Technical Research & Analysis at Prabhudas Lilladher said, "The stock has indicated a strong uptrend recently moving past the barrier zone of Rs 70 levels and currently with series of higher bottom formation is on the rise. The near-term target is Rs 85 levels with support lying near Rs 74 levels and above that if strength sustained, then the stock can reach Rs 95-97 levels. The overall trend would turn weak only after a decisive breach below Rs 70 levels is confirmed." 

Abhijeet from Tips2trades said, "PNB looks bullish but also overbought on the daily charts with next resistance at Rs 82.55. Investors should be booking profits at current levels as a daily close below the support of Rs 76 could lead to a target of Rs 65 in the near term." 

In terms of technicals, the relative strength index (RSI) of PNB stock stands at 69.8, signaling it's trading neither in the overbought nor in the oversold territory. PNB shares are trading higher than the 5 day, 10 day, 20 day, 30 day 50 day, 100 day, 150 day and 200 day moving averages.   

PNB logged a 307% rise in standalone net profit to Rs 1,255.4 crore for the quarter ended June 2023 compared to Rs 308.4 crore in the corresponding quarter last year. Net profit rose 8% on a sequential basis. 

PNB's asset quality also improved in the June quarter. Gross non-performing assets (GNPAs) fell to 7.73 per cent compared to 8.74 per cent in the previous quarter and 11.27 per cent in the June quarter of the previous year. Net NPAs also fell to 1.98 per cent from 2.72 per cent in the previous quarter and 4.28 per cent in the June quarter of the previous year. 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions. 

 

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