Punjab National Bank downgraded to 'Hold' by MarketsMOJO, despite strong growth and attractive valuation

Punjab National Bank (PNB), one of the largest public sector banks in India, has recently been downgraded to a 'Hold' by MarketsMOJO on September 10, 2024. This decision was based on the company's healthy long-term growth, with a net profit growth rate of 26.80% and a positive operating profit growth of 2.58% in the last quarter.
The bank has consistently declared positive results for the past 6 quarters, with the lowest Gross NPA (Non-Performing Assets) at 4.98% and the highest NII (Net Interest Income) at Rs 10,476.25 crore. Its interest earned in the last quarter was also the highest at Rs 28,556.43 crore.

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The trend has also deteriorated from mildly bullish to -0.09% returns since September 10, 2024. Despite this, the stock has a very attractive valuation with a price to book value of 1.1 and a return on assets (ROA) of 0.6.

Moreover, the stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 63.90%, its profits have risen by 196.5%, resulting in a PEG ratio of 0.1. This indicates that the stock has been performing better than the market (BSE 500) which has generated a return of 34.61% in the same period.

However, there has been a decrease in institutional investors' stake in PNB by -0.9% in the previous quarter, with a collective holding of 16.28% in the company. This could be due to their better capability and resources to analyze the fundamentals of companies compared to retail investors.

In conclusion, while PNB has shown strong growth and positive results in the past, the current technical trend and decrease in institutional investors' participation may have led to its downgrade to a 'Hold' by MarketsMOJO. Investors are advised to carefully consider these factors before making any investment decisions.