The quarterly results surpassed most analyst estimates, driven by higher treasury gains of ₹9.1 billion from a stake sale in Canara HSBC Life and strong recoveries from written-off accounts.
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REUTERS/FRANCIS MASCARENHAS
Punjab National Bank shares fell 1.91 per cent to ₹125.60 on Tuesday afternoon, despite reporting a 13.1 per cent year-on-year jump in net profit to ₹5,100 crore for the December quarter. The stock, which hit a 52-week high of ₹135.15 just a day earlier, faced selling pressure as brokerages flagged concerns over shrinking margins and transition costs for new accounting norms.
The quarterly results surpassed most analyst estimates, driven by higher treasury gains of ₹9.1 billion from a stake sale in Canara HSBC Life and strong recoveries from written-off accounts. However, the core performance disappointed with net interest margin contracting 8 basis points quarter-on-quarter to 2.52 per cent, prompting management to slash full-year NIM guidance to 2.6 per cent from 2.8-2.9 per cent earlier.
Brokerages delivered mixed verdicts. While Jefferies maintained a ‘Buy’ rating with a ₹150 target price, citing manageable loan-to-deposit ratios and stable asset quality, Citi issued a ‘Sell’ call with a ₹115 target, expressing concern over margin pressure. CLSA and JM Financial remained cautious, noting that the bank faces an Expected Credit Loss (ECL) transition impact of ₹100 billion, against existing floating provisions of only ₹17.8 billion.
Asset quality showed improvement with gross NPAs declining to 3.19 per cent from 4.09 per cent year-on-year, while the provision coverage ratio strengthened to 96.99 per cent. Trading activity remained heavy with 25.5 million shares changing hands by midday.
Published on January 20, 2026
