PNB Housing Finance Q4 Results - Retail Strategy Shaping Up Well: ICICI Securities

ICICI Securities Report

PNB Housing Finance Ltd.’s strategy to build a scalable and sustainable retail mortgage business has been showing signs of success as reflected in 10% YoY growth in retail business during Q4 FY24 - highest in past five years.

With new management’s focus on widening the target market and expanding yields, it has been investing in building up its affordable and emerging mortgage market while continuing to scale up its prime mortgage business in a calibrated manner.

The same was evident from its affordable housing book reaching 11 times to Rs 17.9 billion in last one year, contributing ~12% of overall disbursements.

Notably, PNB Housing Finance has been able to do so whilst consistently improving its asset quality, with gross non-performing asset reaching 1.5% in Q4 FY24 (3.8% in Q4 FY23).

With focus on sustainably growing the retail book with high yielding segments (17% growth for FY25E), the management plans to sustain return on asset of more than 2.0%, whilst maintaining net interest margin and credit cost (ex-write-backs) at 3.5% and 0.3% on a steady-state basis.

Maintain Buy with an unchanged target price of Rs 1,010, valuing the stock at 1.5 times price-to-book value Sep-25E BVPS.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.