This public sector bank stock has almost doubled investors' money in December so far
The Nifty Bank on Tuesday continued its bully rally and touched a new lifetime high. Similarly, even the Nifty PSU Bank index also hit a record high.
Multibagger Stock: On the back of a healthy outlook and improving asset qualities, the banking sector, especially public sector banks (PSBs), is firing on all cylinders. The Nifty Bank on Tuesday continued its bully rally and touched a new lifetime high. Similarly, even the Nifty PSU Bank index also hit a record high.
Amid all, shares of Punjab and Sind Bank have reported multibagger returns in December 2022 so far (8 sessions). The stock has almost doubled from Rs 20.8 per share on November 30 to today’s new 52-week high of Rs 40.8 per share on the NSE, after surging by more than 10 per cent.
In comparison, the Nifty50 index has extended its gaining rally to trade above 18,550 levels, while Nifty Bank at a record high level above 43,900 levels and Nifty PSU Bank up above 4,500 on Tuesday.
Also Read: PSU banks on fire as PNB, BoB among 6 stocks at fresh 52-week high: What next for Nifty Bank after today's record high
The state-owned bank shares have zoomed 125 per cent in the last one month and jumped over 187 per cent in six months, while it has registered nearly 150 per cent returns in year-to-date or 2022 so far. The counter has been trading at its highest level since February 2018.
Morgan Stanley’s View on PSBs
In its recent report on PSU Banks, Morgan Stanley had said, “Public sector banks have done well so far, and believes that this robust performance may continue in the coming quarters.”
The global brokerage expects that the strong performance of PSBs will be led by higher margins, sustained loan growth, and improving operations leverage over the next few years. It also expects the loan growth to be sustained and credit costs to remain benign for these banks, going forward.
Also Read: PSU Bank stocks in focus: These 3 state-owned banks from mid-cap section gain most in October – analysts cite reasons behind rally?
Punjab & Sind Bank’s Q2 Performance
Punjab & Sind Bank reported healthy earnings in the July-September quarter of the financial year 2022-23 (Q2FY23). The bank’s net profit grew 27.5 per cent year-on-year (YoY) in the second quarter of FY23, while its Net interest income (NII) surged by 25.6 per cent YoY in Q2.
Similarly, the bank also reported improvement in asset quality and margins. The net interest margin (NIM) improved to 3.06 per cent in Q2, while the gross non-performing assets (GNPA) ratio declined by 487 basis points (bps) on a YoY basis to 9.67 per cent.
Also Read: PSU banks to open about 300 branches in unbanked areas by December 2022 as part of financial inclusion drive
Punjab & Sind Bank’s Ratings Upgrade
The public sector bank’s rating has also improved as the rating agency CARE, on September 29, reaffirmed the ratings of the Bonds issued by Punjab & Sind Bank and revised the outlook from "Negative" to "Stable".
The change in the outlook to "Stable" is on account of improvement in profitability and asset quality parameters resulting in a limited impact of credit costs on the profitability of the bank, the rating agency had said.
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