PNB Q2 FY27: Conso PAT +21.7% YoY to ₹5,898 Cr as NPA-led provision drop offsets opex rise

Punjab National Bank's consolidated net profit (the primary basis, after the ₹357 Cr contribution from associates and ₹20 Cr minority deduction) rose 21.7% YoY and 10.5% QoQ to ₹5,898 Cr for Q2 FY27, with consolidated EPS at ₹5.13 against ₹4.46 a year ago and ₹5.06 last quarter. Consolidated revenue (interest earned) grew a slower 8.5% YoY and 5.0% QoQ to ₹35,267 Cr. Standalone bank-level PAT, a more conservative read of the core franchise, grew a narrower 12.8% YoY and 5.3% QoQ to ₹5,532 Cr (EPS ₹4.81) — the roughly 9-point gap to consolidated YoY growth is driven mainly by a 31% YoY jump in associates' profit (PNB Housing Finance, PNB MetLife, regional rural banks) to ₹357 Cr, which more than offset minority interest swinging from a net credit a year ago to a ₹20 Cr deduction this quarter. No PNB-specific street PAT estimate was available pre-print, but Motilal Oswal's October 5 PSU-bank sector preview had pegged sector PAT growth at ~27% YoY/~19% QoQ — PNB's actual growth trailed that pace on both counts, a modest miss against the broader sector trajectory rather than a company-specific estimate. The profit growth was overwhelmingly a provisioning story, not an operating one: consolidated provisions (other than tax) collapsed 88% YoY and 86% QoQ to just ₹75 Cr, as asset quality kept improving — gross NPA fell to 2.55% (from 3.45% a year ago and 2.78% last quarter) and net NPA to 0.25% (from 0.36% and 0.28%), bringing net NPA under the bank's own <0.3% FY27 target even as gross NPA sits just above the <2.5% ceiling management had guided to. Consolidated operating profit, by contrast, grew only 5.7% YoY and actually fell 1.4% QoQ to ₹7,564 Cr — operating expenses outpaced interest income, so net profit margin (on the pre-minority basis comparable across quarters) expanded to ~14.3% from 14.1% QoQ and 13.2% YoY, while operating margin (operating profit/interest earned) compressed to ~21.4% from 22.8% QoQ and 22.0% YoY. Standalone cost-to-income ran ~50.4% this quarter, essentially flat versus ~50.4% last quarter and still well above the 47-48% range management guided for by FY27-end — a target the bank has not yet begun closing in on. Against management's own July guidance, credit growth is running ahead of plan: standalone advances grew 15.6% YoY (consolidated +15.7%) versus the guided 12-13% RAM-led range, matching the ~15% YoY advances growth our pre-result preview flagged as the Street's base case; deposits grew ~9.9-10.0% YoY, also in line with the preview's ~10% expectation. That combination pushed the standalone credit-deposit ratio to 73.7%, up from 70.1% a year ago and 72.0% last quarter — the widening gap the preview explicitly flagged as the key swing risk ("can a widening credit-deposit gap... keep asset quality pristine") has materialised, though asset quality improved rather than deteriorated this quarter. Half-year consolidated PAT of ₹11,713 Cr is tracking comfortably toward management's FY27 net profit target of over ₹20,000 Cr. The quarter's other disclosed developments were largely non-financial: an October 7 RLLR hike to 8.35% supports NIM on the floating-rate book consistent with the repricing-tailwind thesis, an October 14 RBI penalty of ₹8.08 lakh for operational non-compliance is financially immaterial, and an October 2 provisional update showed global business up 11.95% YoY to ₹31.2 lakh Cr, corroborating the advances/deposits trend in the final numbers. No management press release or post-result commentary was available in this filing to cross-check tone against the "cautiously optimistic" outlook flagged after the July concall. Going into Q3, the trajectory to watch is whether operating profit growth can catch up to the pace of profit growth now being driven by provisions — NPA ratios have room to fall further toward the <2.5% gross NPA goal but can't indefinitely substitute for cost discipline, with the 47-48% cost-to-income target still 200+ basis points away heading into the back half of FY27.