Punjab National Bank is trading lower by 3% at Rs 692, its lowest level since September 2009 on the Bombay Stock Exchange.
The stock of state-owned lender has underperformed the market by falling 8% in past one month post Q1 earnings as compared to 7% rise in benchmark Sensex and 1.4% rise in banking sector index Bankex.
Analyst at Kotak Securities downgraded the stock to Reduce from Accumulate saying that the near term outlook remains challenging for the stock on back of high share of stressed assets, which is around 12% of loan book, along with relatively lower coverage ratio of 62.8%.
The bank further added Rs 1,240 crore during Q1 FY13, taking total cumulative restructured book to Rs 25,520 crore (8.7% of loan book), which is higher than the peers. Analyst believes, this could impact the bank’s future earnings, if Reserve Bank of India’s working group recommendations on restructuring are implemented.
The stock opened at Rs 710 and hit a high of Rs 714 on the BSE. A combined 467,877 shares have changed hands on the counter so far on both the exchanges.