PNB - 1QFY2014 Result Review - Angel Broking

PNB reported weak set of numbers for the quarter, affected by asset quality challenges. NII grew at subdued pace of 5.7% yoy. Other income grew at 15.1% yoy, aided by higher treasury gains. Overall, pre-provisioning profit for the bank grew at muted 4.7% yoy. The bank found no respite on asset quality pressures, as slippages during the quarter came in at Rs. 3594cr (almost half of it contributed by a single exposure to Gem & Jewelry sector). Consequently, the Gross NPA levels jumped up sequentially by 12.1%. PCR for the bank came off by 416bp and hence, Net NPA levels increased sequentially by a much higher 25.2%. Overall, the bank reported marginal earnings growth of 2.4% yoy. AT CMP PNB is currently trading at 0.6x FY2015E ABV.

We maintain our Accumulate recommendation on the stock.

Source : Equity Bulls

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