Friday 7 November 2008

Buy PNB, target of Rs 715: Motilal Oswal

Motilal Oswal has maintained its buy rating on Punjab National Bank (PNB) with a target of Rs 715 in its November 3, 2008 research report. "PNB’s 2QFY09 numbers were significantly higher than our estimates. Key highlights: Loans grew 29% YoY to Rs 1.3 t and deposits grew 24% YoY to Rs 1.86 t. CASA declined to 39%. NII grew 33% YoY v/s our estimate of 19% growth; margins improved 30bp YoY and 51bp QoQ to 3.78%. Robust PAT growth of 31% YoY to Rs 5.1 billion."

"We like PNB for its inherent strengths of large branch network in cash rich North India, strong liability side of balance sheet, higher sustainable margins, strong Tier-I at 9%+, and better asset quality. Post 2QFY09 results, we have increased our EPS estimates by 3-5% for FY09-10. The stock trades at 5.6x FY09E EPS and 1.1x FY09E BV. Maintain Buy, target Rs 715," says Motilal Oswal's research report.

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Source: Moneycontrol

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