PNB - Focus remains on containing impairment levels over growth - Kotak

Our recent interaction with the management highlighted that the business environment (loan impairment and growth) remains challenging in the corporate portfolio. At this stage, there is greater focus on loan impairment as compared to growth. We maintain our REDUCE rating with TP at Rs. 610 (from Rs. 550 earlier) as RoEs are subdued (13%), while earnings growth of >40% in FY2015E is primarily driven by better treasury contribution. Earnings (adjusted for treasury income) are likely to grow <10% CAGR in FY2015-16E.

Source : Equity Bulls

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