PNB management reiterated its strategy to be highly focused on margins, with a proper mix of credit growth and sustaining asset quality. PNB’s margins have expanded by about 50 bps during FY2011E.
For the near term, we expect margin trend to remain strong and asset quality may not worsen from current levels. Stock trades at 1.5XFY2012E PBR for about 23% RoEs.
PNB is expected to report an EPS of Rs 165 for FY 2012 and is thus very cheap compared to Private Sector Banks. Consensus Target on the Stock is Rs 1500.
