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.

The stock went into the print at ₹116.3, down 0.4% over the past month of trading.

For context: this is the highest quarterly PAT in the last 6 quarters on our records; PAT has now risen for 5 consecutive quarters; revenue is at a 6-quarter high.

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.