Punjab Natl.Bank (PNB)

FairStock Score: 45/100 — MIXED

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 1/1

Key Financials

Strengths

• Trades below book value: P/B 0.97 against book value of ₹115.84, offering downside support.
• Low P/E of 8.36 implies an earnings yield of nearly 12%, with a dividend yield of 2.24%.
• Piotroski F-Score of 8/9 and positive free cash flow of ₹20,497 crore suggest improving financial health.
• Latest quarter net profit of ₹5,577 crore on sales of ₹32,889 crore shows strong earnings momentum.
• Promoter holding of 70.08% provides ownership stability for a public-sector bank.

Concerns

• Debt/equity of 12.64 is high, and while normal for banking, it magnifies balance-sheet risk.
• ROCE of 6.32% is weak, indicating low return on total capital employed.
• Sales growth of 43.22% far exceeds profit growth of 22.26%, suggesting margin pressure.
• FairStock Score of 45/100 is mixed, and Altman Z-Score of 0.36 cautions against relying on conventional distress metrics.

AI Analysis

At ₹112.71, Punjab National Bank sells for roughly 97 paise for every rupee of book value. Graham taught me that price is what you pay, value is what you get. Here book value is ₹115.84 and the Graham Number is ₹203.83. Even with a FairStock Score of 45/100, that asymmetry is hard to ignore. The P/E is 8.36, so the earnings yield is nearly 12%, and the dividend yield of 2.24% compensates me while I wait. PNB's ROE of 13.36% is respectable for a public-sector bank, and a Piotroski F-Score of 8 out of 9 suggests the recent improvement is not cosmetic. Latest-quarter net profit came in at ₹5,577 crore on sales of ₹32,889 crore, and free cash flow is positive at ₹20,497 crore. Promoter holding at 70.08% also reduces the risk of reckless governance. But I must be honest: banking is a business where leverage is normal, and PNB's debt-equity of 12.64, while typical for a bank, means management must remain conservative. ROCE of only 6.32% tells me the bank is not earning exceptional returns on all capital employed. Sales growth of 43.22% is flashy, yet profit growth of 22.26% lags it, so the incremental business is not translating one-for-one into the bottom line. The Altman Z-Score of 0.36 and EV/EBITDA of 1,716.51 are essentially meaningless for a bank, but they remind me that conventional distress metrics must be ignored in favour of asset quality and provisions. The DCF value of ₹497.39 seems generous; I would rather focus on tangible book value. I will only buy PNB as a conservative asset play, not as a compounder. If it can maintain 13-14% ROE and modest growth continues, the market will eventually re-rate it.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer