Is this right time to invest in PNB?

NO. I don't think so. There are so many uncertainty and there are many questions I get about PNB and so let me clarify why.

• The company is a PSU which means they don't have operational excellency. So they are always an avoid. Check https://shabbir.in/business-checklist/
• The company is starting to see problems. There aren't any easy solutions to it. Company has a market cap of 27k Crore and they have issue of 11k Crore. Just imagine the quantum of issue.
• Even if management is good but business has problems, company needs time. Check the charts of Lupin, The stock touched 800ish in November and it is still around 800ish. Needs time correction.

So if you want to consider PNB, do it only when you see all the issue behind and then wait for 3 to 6 months time before even consider buying it.

 

Thanks.

 

U is fine. Still see the timeline. Again in some cases it will be slightly faster than others but I will share a lot of details and so bear with me.

December 2016 when we see a big fall because of the USFDA issue.
May 2017 is when we see the final dip in the stock.
August of 2017 is when the recovery process started.

Few points to consider for Divis lab.

• They have few drugs that were still allowed in the US from the problematic plant because there is no alternative to those drugs. (This is the reason when I looked into the stock. Something really unique)
• Only company that managed to get USFDA revisit within the 6 months time frame.
  
• Only 35% of total business of the company is from US.

Still the issue needed a timeline of 8 to 9 months. As of now Divis is still trading at PE multiple of 30 where as historically it has always been above 40 (Still I am not buying it). This is possibly because of the sector being at discount.

With so much of efficiency and so much of USP, company needed 9 months. Now let us look at Lupin.

Lupin has had lot of issues but still managed a very healthy growth from US. The USFDA clearance was expected in Nov 2017 but it was a negative surprise. We are still at the same price level because there is very little price damage expected from here (assuming there is not much negative surprises) but to turn things around, it will need another couple of quarters for sure.

Now we come to PNB and it has its own issues of operational efficiency and then we have the PSU bank fruads. So I think it will need more than a year or so from here before anyone can even think about it. I won't but those who want to.

 

Thanks.