Earnings Outlook
PNB's Jan-Mar profit seen rising 44% on higher recoveries
This story was originally published at 16:49 IST on 26 April 2025
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By Shubham Rana
NEW DELHI – Punjab National Bank's net profit for the quarter ended March is expected to jump mainly because of a fall in provisions and better recovery from written off accounts, analysts said. The New Delhi-based lender's net profit for Jan-Mar is seen rising 44.0% on year to INR 43.36 billion, according to the average of the estimates of six brokerages.
Sequentially, however, the bank's net profit is seen declining 3.8%. PNB's net profit for the quarter ended December had surged 103% on year to INR 45.08 billion due to a provision write-back. The bank reported a net profit of INR 120.63 billion for Apr-Dec, up 130.5% on year.
Nirmal Bang Institutional Equities had the lowest net profit estimate for PNB at INR 36.98 billion, while the highest estimate was INR 46.97 billion by Emkay Global Financial Services. The bank has not yet announced the date when it will detail its Jan-Mar and 2024-25 (Apr-Mar) financial results.
"We expect steady business momentum with sequential growth of +1-2% QoQ (quarter-on-quarter)," Elara Securities India said in a pre-earnings report. "We expect better recovery from written off accounts, thereby lending support to earnings," the brokerage said. Emkay Global also expects better treasury gains to add to the bank's profit for Jan-Mar.
Kotak Institutional Equities expects PNB to report modest operating profit growth for Jan-Mar. It pegs PNB's pre-provision profit rising just 3% year-on-year to INR 65.94 billion and the net profit increasing 39% on year.
The net interest income--the difference between interest earned and expended--is seen rising 9.0% on year and 2.4% on quarter to INR 112.92 billion for Jan-Mar, as per the average of estimates from six brokerages. The net interest income was INR 110.32 billion in Oct-Dec.
The state-owned bank's net interest margin is seen falling marginally from the previous quarter, owing to a "marginal increase in cost of funds", Kotak Institutional Equities said in a report. The global net interest margin was 2.93% in Oct-Dec.
The bank's credit growth has moderated because of cost pressures, but remains in line with the management's guidance for FY25. PNB's global advances rose 13.6% on year to INR 11.17 trillion as on Mar. 31, well within the management's guidance of 13-14%. Global deposits were INR 15.66 trillion as on Mar. 31, up 14.3% on year.
PNB's asset quality is seen improving even as slippages may rise, analysts said. The gross non-performing assets ratio fell to 4.09% as on Dec. 31 from 4.48% a quarter ago, and the net non-performing assets ratio improved to 0.41% at the end of December from 0.46% a quarter ago.
Slippages are expected to have risen quarter-on-quarter in Jan-Mar due to seasonal agricultural stress, but this may be offset by healthy recoveries, Emkay Global said in a pre-earnings report. The bank's fresh slippages rose slightly to INR 16.0 billion in Jan-Mar from INR 15.94 billion a year ago.
Credit costs are expected to remain contained and lower than other tier-II state-owned banks because of lower net NPA ratio, analysts said.
Key monitorables for the bank would be its outlook for recoveries on bad loans during FY26, Kotak Institutional Equities said. Other key montiorables include business growth, margins, and credit cost outlook, analysts said.
Shares of PNB Friday ended 3.3% lower at INR 99.29 on the National Stock Exchange.
Following are the Jan-Mar earnings estimates for Punjab National Bank based on reports from six brokerage firms in descending order of the estimate of net profit:
| Brokerage firm | Net interest income (in INR million) | Net profit (in INR million) |
| Emkay Global Financial Services | 111,331.00 | 46,970.00 |
| Mirae Asset Sharekhan | 113,080.00 | 45,500.00 |
| Motilal Oswal Financial Services | 115,027.00 | 45,462.00 |
| Elara Securities India | 113,970.00 | 43,517.00 |
| Kotak Institutional Equities | 110,562.00 | 41,739.00 |
| Nirmal Bang Institutional Equities | 113,566.00 | 36,978.00 |
| Average | 112,922.67 | 43,361.00 |
End
Edited by Avishek Dutta
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