Accumulate Punjab National Bank - Emkay

Reco: ACCUMULATE
CMP: Rs 940
Target Price: Rs 1200

Operating results inline; Stressed assets rise

- PNB Q3FY12 NII at Rs35.4bn (10%) was inline with estimates. Steep rise in provisions for std restr assets + MTM lead to lower than expected growth in net profit at 5% yoy

- Key +ves – (1) Strong advance growth of 19%yoy, (2) stable NIM's at 3.9%, (3) slippages of Rs9.3bn (ex aviation) at 7-qtr low

- Key –ves – (1) reco+upgrades almost half of Q1/Q2FY12 leading to sharp spike in GNPAs, (2) restructured assets (ex telecom) still high at Rs9.2bn

- Lowered FY12E/FY13E EPS 8%/1% to take into a/c higher restr and MTM provisions. Policy of aggressive LLPs is strong point. Maintain ACCUMULATE with TP of Rs1200.

Source : Equity Bulls

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