PNBHOUSING - PNB Housing Finance Limited Share Price

Management's outlook for PNB Housing Finance Limited reflects a positive trajectory for FY26, highlighted by expectations of an 18% retail loan growth and an affordable loan book target of INR 9,500 crores. The management anticipates corporate disbursements in the range of INR 1,500 to INR 2,000 crores. The net interest margin (NIM) is projected to remain stable, while credit costs are expected to be benign due to recoveries from the written-off pool. The return on assets (ROA) is forecasted to range between 2.5% and 2.6%.

Significant forward-looking points include:

• Retail loan book growth achieved 18.2% YoY, reaching INR 74,802 crores as of March 31, 2025, exceeding the target of 17%.
• Total loan assets crossed INR 76,765 crores, marking significant growth from the previous fiscal year.
• The affordable housing segment's loan assets crossed INR 5,000 crores in late March 2025, contributing 40% to Q4 retail disbursements and 36% for FY25.
• Recovery from written-off pools increased substantially from INR 100 crores to INR 336 crores YoY, leading to a gross NPA reduction to 1.08% by March 31, 2025.
• The company achieved a PAT of INR 1,936 crores for FY25, reflecting a 28.4% YoY increase, with a recommended dividend of INR 5 per equity share.
• Plans to increase branch network from 356 to 500 by March 2027, focusing on affordable and emerging markets.
• The anticipated shift in product mix, with a strategic focus on corporate, affordable, and emerging sectors to enhance margins.

Overall, PNB Housing Finance remains committed to sustainable growth while maintaining strong asset quality and profitability.

1. Renish: "Congrats on a great set of numbers. On the Affordable yield size, we have seen a pretty sharp fall sequentially. Is this due to seasonality?"

   Girish Kousgi: "In Quarter 4, we focused more on volume and the introduction of PMAY ISS has influenced yields. I believe it's somewhat seasonal, and from Quarter 1, we expect yields to pick up to about 12.65% in FY'26."

2. Abhijit Tibrewal: "What proportion of disbursements in Q4 and FY25 came from BT-in in the Affordable book?"

   Girish Kousgi: "In Q4, BT-in for Affordable was about 12%. For the entire fiscal year FY25, the BT-in reached around 21%-22%, with BT-out being negligible"”about 1%-2%."

3. Nishant Shah: "Given expected rate cuts, how should we think about growth in the Prime segments?"

   Girish Kousgi: "Our growth strategy involves slower growth in Prime, faster in Emerging, and the fastest in Affordable. Rate cuts will stimulate demand, and our focus is on maintaining margins through a smart product mix."

4. Viral Shah: "What gives you confidence in a possible rating upgrade?"

   Girish Kousgi: "Given our consistent performance metrics over the last five quarters, we expect a rating upgrade by the end of this financial year. However, discussing future regulatory changes related to promoter stakes is premature."

5. Siraj Khan: "In terms of ticket size, what are the predominant segments seeing growth?"

   Girish Kousgi: "Our average ticket size is about 15-16 lakhs. We see strong performance across all geographies"”North, South, and West"”so we aren't focusing on any specific area for risk."

6. Harshit Toshniwal: "What led to the year-on-year decline in the cost of funds, and how do you expect it to pan out next year?"

   Vinay Gupta: "The cost of borrowing has declined due to a rating upgrade, impacting our overall funding cost positively. We expect further reductions of about 10-15 basis points in the next 2-3 quarters."