The PNB stock gained momentum on Wednesday after witnessing some pressure in the income trend backed by decent Q4FY26 earnings numbers. At 2:37, the stock was quoted at Rs 110.20, up Rs 2.37, or 2.27% over the previous close of Rs 107.89. The stock opened at Rs 110.41 and later touched a high and low of Rs 111.74 and Rs 107.89, respectively.
Interest income lifts Q4 profit by 14.4%
PNB’s net profit for the quarter ended March 2026 rose 14.4% to Rs 5,225 crore against Rs 4,567 crore in the year-ago period. The jump was aided by a strong rise in interest income, though the overall revenue trends look somewhat muted.
Total income stood at Rs 36,319 crore as against Rs 36,705 crore in the year-ago period and was down on a sequential basis. But interest income was better at Rs 32,157 crore against Rs 31,989 in the year-ago period, indicating a steady core lending business.
Net Interest Income (NII) is sequentially up 3.5% to Rs 10,380 crore from Rs 10,757 crore. NII is the difference between interest income and interest expense. NII is down 3.5% YoY.
Asset quality shows marked improvement
The bank has seen improvements in asset quality. The Gross Non-Performing Assets (GNPA) ratio stood at 2.95% as against 3.95% last year. Net NPAs have declined to 0.29% as against 0.40% for the year-ago period on the back of better recoveries and loan quality.
The asset quality too improved sequentially with GNPA slipping to 3.19 per cent versus the previous quarter and NNPA at 0.32 per cent versus 0.32 per cent last quarter.
Lower costs support profitability
Provisions have also declined significantly to 424 crore for the fourth quarter from Rs 1,150 crore in the third quarter of this financial year. Provisions were up from Rs 360 crore in the year-ago period but were sequentially lower, thus bolstering the profitability in the current quarter even with margin pressures.
Deposits, credit creation and capitalisation
The bank’s balance sheet growth has also seen a substantial spurt in total term deposits, which are up by 10.9% YoY to Rs 11.01 lakh crore as of March 31, 2026. Retail credit has also risen by 8.3% YoY to Rs 2.81 lakh crore. Tier-1 CAR stands at 13.62% as against 12.33% in the year ago period to strengthen the bank further. Return on Assets (RoA) has improved to 1.06% against 1.02% in the previous year, implying better operating efficiency.
Dividend and strategic orientation
PNB has also announced a dividend of Rs 3 per equity share (150% of the face value of Rs 2) for FY26. Pending shareholder approval at the bank’s annual general meeting next month, the dividend will be paid to shareholders.
PNB is also significantly increasing its investments in cybersecurity as part of its strategic direction by over 50% in FY27, putting aside Rs 7-8 billion (USD 73.5-84 million), or about one-fifth of its technology budget or its total budget, to better protect itself from rising AI-driven cyber threats.
Outlook divided by brokerages
The street appears to be divided on the stock.
Jefferies maintains a “Buy” rating on the stock with a target price of Rs 130 while citing controlled credit costs.
Citi, on the other hand, maintained its ‘Sell’ rating on the stock with a target price of Rs 103, citing margin pressures.
CLSA maintained an ‘Accumulate’ rating with a target price of Rs 135.
Morgan Stanley recommended an ‘Underweight’ rating on the stock with a target price of Rs 88, citing a weakening in core revenue trends.
While profitability and asset quality remain robust, margin pressure seems to be keeping analysts wary about any immediate upside in PNB earnings.
