PNBHOUSING - PNB Housing Finance Limited Share Price

Management's outlook for PNB Housing Finance Limited (PNB HFL) for FY 2026-27 includes a robust growth projection, with a loan book expected to exceed INR 1 lakh crores. They foresee the retail loan book expanding between 18% to 20%. The net interest margin (NIM) is projected to range from 3.55% to 3.65%. Furthermore, the return on assets (ROA) is anticipated to be between 2.4% and 2.5%, supported by benign credit costs due to recoveries from the written-off pool.

Key forward-looking points highlighted by management include:

1. Retail Loan Growth: A 16% year-on-year growth in the retail loan book to INR 86,946 crores as of March 31, 2026, with increased contributions from affordable housing, which currently makes up 40% of the retail loan assets, up from 37% the previous year.

2. Disbursement Performance: Retail disbursements in Q4 FY26 grew 36% year-on-year to INR 9,355 crores, while the affordable segment saw a sequential growth of 59% to INR 1,249 crores.

3. Capital Adequacy and Profitability: The capital adequacy ratio stands at 27.26%, with a profit after tax of INR 2,291 crores for FY26, an 18% increase from the previous year. A dividend of INR 8 per equity share has been proposed.

4. Enhanced Digital Focus: Management is prioritizing digital transformation, with nearly 15% of leads generated through digital channels, and a fully digitized onboarding process aimed at improving operational efficiency and customer experience.

5. Asset Quality Metrics: The Gross Non-Performing Assets (GNPA) ratio has improved to 0.93%, reflecting strong recovery efforts, with total recoveries from written-off accounts reaching INR 332 crores for FY26.

The company maintains a favorable outlook aligned with ongoing urbanization and government support for affordable housing, highlighting its strategic focus on enhancing geographic distributions while leveraging existing branches for greater productivity.

Q&A Section of PNB Housing Finance Earnings Call Transcript (April 21, 2026)

Question: What are your key priorities for PNB Housing in the quarters ahead, specifically regarding expanding lending reach, improving customer service, and utilizing digital platforms?
Answer: Our priorities focus on leveraging digital tools, like the Infinity app, which streamlines onboarding and improves efficiency. We aim to grow our AUM by 18% to 20%, simplifying operations to be more customer-centric. Increasing productivity from our 393 branches is crucial, and maintaining low GNPA is essential as we've reduced it to 0.93%.

Question: How are you approaching risks such as rising funding costs, regulatory compliance, and credit defaults while ensuring steady profitability?
Answer: In Q4, we reduced our borrowing cost to 7.35%. We work closely with credit agencies to improve ratings, enhance liquidity buffers, and diversify funding sources through debt markets. This strategy mitigates risks while ensuring profitability.

Question: Can you provide more details on your growth guidance at a segment level, especially for Affordable and Emerging segments?
Answer: We're targeting a 50% growth in the Affordable segment, expecting a significant increase in disbursements. Currently, the Affordable and Emerging segments make up 40% of our portfolio, and we anticipate this to reach a 50/50 mix in two years, prioritizing Affordable growth in our overall strategy.

Question: Regarding corporate disbursements of INR 335 crores, could you provide details on the account's specifics?
Answer: The corporate loan includes primarily one account in Mumbai. We're focusing on reputable builders across top cities, maintaining yields between 11.5% to 12%, while corporate finance will remain a small portion of our overall book, around 3% in FY27.

Question: With the recent increase in non-individual home loans, how do you plan to manage your loan mix?
Answer: While non-housing loans increased, our strategy remains balanced, aiming for around 38%-40% loan mix. We will focus on maintaining compliance with regulatory norms and gradually improve our NIM while meeting market demands through careful adjustments in both housing and non-housing segments.

Question: What is the reason behind the 75 basis point drop in yields for the Affordable segment while disbursements rose?
Answer: The yield drop resulted from the repo rate decline and competitive pricing pressures. Despite this, our NIM remains stable due to reduced funding costs. We anticipate further improvements as we expand into Micro LAP and similar segments to enhance yields moving forward.

Question: What credit cost outlook is factored into your 2.4% to 2.5% ROA guidance for FY27?
Answer: We expect a continued negative credit cost trend, factoring in 15-20 bps for FY27. This guidance is based on expected recoveries from written-off pools and a shift toward a higher mix of Emerging and Affordable segments, supporting sustainable ROA performance.

These answers summarize key points made during the Q&A session, capturing both strategic insight and forward guidance expressed by the management.