Yields have topped; the show begins. Thy name is BOND.
India’s debt market is undergoing a slow structural shift, fueled by monetary easing, evolving investor preferences, and greater global integration. The RBI’s rate-cutting cycle, alongside fiscal support, is fueling credit flow, lowering borrowing costs, and boosting domestic demand. Falling yields have raised bond prices systematically, unlocking trading gains. PNBGILTS, the primary dealer, is well-positioned to capitalize through active market-making and portfolio strategies. Investor focus is shifting toward SDLs and corporate bonds due to better yields, prompting portfolio realignment. Global index inclusion is drawing steady foreign interest, enhancing liquidity and visibility. These trends are deepening the market, accelerating debt issuances, and setting the stage for PNBGILTS to expand earnings and strengthen its position further
We initiate buy with a price target of INR 145
Amid softer interest rate cycle sand rising global interest, India’s debt landscape is evolving into a more mature, diversified, market expanding phase. For PNBGILTS, this marks a timely inflection point to harness market depth, investor flows, and yield dynamics for sustained growth. We value PNBGILTS at a modest 1.2 times of its estimated book value for FY 2027 and rate it a tactical buy from the current levels with a price target of INR145.
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Report attached.