Shares of Punjab & Sind Bank have witnessed a sharp rally in the last few weeks on the back of multiple positives including its aggressive expansion plans, aim to reach CASA ratio of 35 percent by March and expectations of ₹1,100 crore in profits this year on the back of bad loans resolutions.
The stock has more than doubled investors' wealth in just 90 days, with the majority of the gains occurring in the current month.
The shares of this public sector lender gained traction at the beginning of December, delivering 78.60 percent returns so far, rising from ₹20.80 apiece to the current level of ₹37.20, while the stock has delivered a staggering return of nearly 133 percent over the last three months, outperforming the Nifty PSU Bank index, which gained 37.13 percent during the period.
Continuing its uptrend on Monday, the stock gained as much as 10 percent to hit a new 52-week high of ₹37.2 apiece, while the market capitalisation of the bank surged to ₹25,179.5 crore. During the trade, the stock recorded a volume of 39.1 million shares, both on the NSE and BSE.
On the technical front, the stock is trading 127.90 percent above its 200 DMA and 96.56 percent above its 50 DMA. At the current price, the stock is trading 185.77 percent higher than its 52-week low of ₹13 seen in June of this year.
The bank is targeting a Current Account Savings Account (CASA) ratio of 35 percent by the end of the ongoing fiscal year, and it has undertaken various efforts to achieve the goal, said MD Swarup Kumar Saha in an interview with PTI.
Besides, he said, the bank is focusing on mobilising salary accounts and salary deposits to augment its low-cost deposit base.
As part of this endeavour, he said, the bank has recently tied up with the Chandigarh Municipal Corporation to open salary accounts for their 10,000 employees.
Similarly, he said, the bank has partnered with Lucknow Nagar Nigam and opened 14,000 salary accounts for their staff.
In addition, the bank is also expanding its physical presence in terms of branches. Recently, the bank opened three branches. Out of these, two branches were opened in Rajasthan and one in Bihar.
With the opening of these branches, Punjab & Sind Bank has 1,528 banking outlets across the country, according to a PTI report.
The bank expects to clock a net profit of around ₹1,100 crore in the current financial year on the back of the resolution of bad loans.
For the September quarter, the public sector lender posted a 27.52 percent YoY jump in its standalone net profit to ₹278 crore as against a net profit of ₹218 crore during the same quarter of the previous fiscal.
The total income of the bank during the July-September quarter of FY23 rose to ₹2,120.17 crore against ₹1,974.78 crore in the corresponding period of FY22.
The bank's asset quality improved as its gross non-performing assets declined to 9.67 percent of gross advances in the September quarter from 14.54 percent in Q2 FY22 and the gross NPA ratio declined to 2.24 percent from 3.18 percent in Q2 FY22.
In value terms, the gross NPAs stood at ₹7,128.45 during the quarter as against ₹9,822.80 crore in Q2 FY22. As a result, the bank's provisions for bad loans and contingencies declined to ₹125 crore for the quarter, from ₹203 crore a year ago.
In addition to that, the banks' Provision Coverage Ratio (PCR) improved further to 89.16 percent as against 84.44 percent in the year-ago quarter.
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