Punjab National Bank - March 2013 Results Preview - Motilal Oswal

- With a shift in management's focus on consolidation, business growth is expected to be moderate, with a YoY loan growth of 10% and deposit growth of 9%. CASA ratio is expected to improve as well.

- NIMs are expected to be stable QoQ at ~3.5%. Pressure on lending yields would continue but its impact is expected to be neutralized by reduction in high cost bulk deposits and containment in cost of funds.

- Net slippage ratio is likely to increase QoQ (~1.5% v/s nil in 3QFY13); however, it would be significantly lower than the average of INR27b (4.3%) in 1HFY13, led by both containment of fresh slippages and improvement in upgradation and recovery.

- Restructured loan portfolio is expected to rise led by CDR cases and stress in large corporate segment.

- The stock trades at 0.7x FY14E and 0.6x FY15E BV, and 4.2x FY14E and 3.4x FY15E EPS. Buy.

Source : Equity Bulls

Keywords