PNB: TP at Rs 180, 32% upside from current level
Posted on 7th July 2017 |
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| After the 24% correction in the past two months, we believe incremental risk reward is turning favourable again for PNB. Our adjusted book valuation of 0.55x Mar-19 book factors in Rs 790 billion of total stress vs gross NPAs of Rs 554 billion (FY17) adequately captures any asset quality risks. Near-term provisioning will remain elevated given the lower coverage of 41%, but the large stock of prudentially written-off NPAs provides comfort on recoveries/ upgrades. Subsidiaries now contribute 33% of PNB’s valuation, and will continue to accrete value. We maintain our TP of Rs 180, which is based on 0.8x Mar-19 book and implies 32% upside from current levels. While we previously believed street expectations from the resolution of NPAs were high, with the recent 24% correction, we believe expectations are more realistic now. We factor in 60% loss given default, system loan growth remains anaemic at 5% y-o-y, and coupled with MCLR migration implies that PPOP pressure will continue for corporate banks, including PNB. We highlighted in our May-17 downgrade note that PNB’s large one-off income in FY17 will not recur, and hence we factor in PPOP of Rs 125 billion/ Rs 132 billion in FY1Y18/19F vs Rs 160 billion of PPOP in FY17. Without much reliance on such one-off income, we expect ROE of 10% by end-FY19F. We revise down FY18F PAT by 56%, but FY19F remains largely unchanged. With ~10% ROEs, current valuation at 0.55x Mar-19 book is undemanding, in our view. We value PNB’s subsidiaries at Rs 46/share after applying a 15% holding discount. Our TP implies 0.8x Mar-19 adjusted book. Subsidiaries now contribute 33% of PNB’s valuation, and will continue to accrete value. We maintain our TP of Rs 180, which is based on 0.8x March 2019 book and implies 32% upside from current levels. Risks: Sharperthan-expected moderation in PPOP/assets and higher-than-expected LGD are the key downside risks, in our view. |
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Bharti Airtel defers Q2 results till Nov 14 over ambiguity on AGR verdict
Posted on 29th October 2019 |
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Bharti Airtel said on Tuesday it has postponed its second-quarter earnings report to mid-November, as the wireless operator sought clarity on the court ruling asking telecom firms to cough up overdue payments to the government.
Shares of the company, which was expected to release its quarterly numbers later in the day, dropped 3.3 per cent in early trade. |
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Rupee slips 8 paise vs US dollar in early trade amid drop in oil prices
Posted on 7th October 2019 |
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The rupee on Monday opened eight paise lower at 70.96 against the US dollar amid drop in crude oil prices and rise in Asian equities. The domestic unit on Friday closed almost flat at 70.88 against after the Reserve Bank of India (RBI) in a widely expected move cut key interest rates by 0.25 percentage point. On a weekly basis, the local unit slumped by 32 paise. |
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LIC pips private insurers in first-year premium growth during April-August
Posted on 13th September 2019 |
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In the first five months of the current financial year, first-year premiums of life insurance companies grew by 39.84% (year-on-year) at Rs 1.05 lakh crore as compared to Rs 75,588.35 crore in April-August of 2018-19. Life Insurance Corporation of India (LIC) continued to grow at a faster pace compared to private insurance players, shows the data from the Insurance Regulatory and Development Authority of India (Irdai). |
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Apollo Hospitals rules out further stake sale
Posted on 13th September 2019 |
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Apollo Hospitals Enterprise (AHEL) has ruled out further dilution of promoters’ stake in the company. The company also said its Rs 1,337-crore stake sale of Apollo Munich Health Insurance with mortgage major HDFC will be concluded by October. Following these stake sales, the promoters’ pledged position will come down from a high of 76% to 54% by October and eventually to 20% by November or December, company sources said here. |
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World trusts India on Kashmir, not us: Pakistan minister Ijaz Ahmed Shah
Posted on 13th September 2019 |
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In a major embarrassment for Pakistan and its Prime Minister Imran Khan, the country's Interior Minister Ijaz Ahmed Shah, a retired brigadier, said the international community didn't believe Pakistan's narrative on Kashmir; instead it is India whose version is trusted. |
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| Be the first person to write a business review for PNB: TP at Rs 180, 32% upside from current level |
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