PNB Housing Finance Targets Rs 1 Lakh Crore Retail Book By FY27
Retail loan segment growth stood at 18.2% in FY25 and could exceed 20% in another two years, according to the company’s CEO.
PNB Housing Finance is aiming to expand its retail loan book to Rs 1 lakh crore by March 2027, according to the company's Managing Director and Chief Executive Officer Girish Kousgi.
The housing loan provider's retail book currently stands at Rs 74,800 crore and the growth in the segment could exceed 20% in the next two years, if the target set for fiscal 2027-end is met.
“In fiscal 2027, the overall retail book is going to be Rs 1 lakh crore. Out of Rs 1 lakh crore, affordable housing is going to be Rs 15,000 crore. Emerging markets will account for Rs 25,000 crore. So, 40% of the book in FY27 is going to be from emerging and affordable housing segments. The prime segment will comprise the remaining 60% or Rs 60,000 crore,” he said during a conversation with NDTV Profit on Tuesday.
Kousgi noted that retail growth was 10% two years ago, 14.1% in fiscal 2024 and 18.2% in fiscal 2025, reflecting a clear upward trend. “If you look at the entire mortgage industry, the industry is growing at about 13% to 13.5%. We were below industry average. Now, we are far higher than the industry average,” he said.
To enhance profitability, PNB Housing Finance has introduced a new loan-against-property vertical in fiscal 2026 and plans to resume corporate lending with disbursements of Rs 1,500 crore this year, Kousgi pointed out.
These initiatives, combined with the higher-yield affordable and emerging segments, will support stable and improving margins, he said. The net interest margin stood at 3.7% in fiscal 2025 and is expected to remain steady for the next few quarters before rising to 4.1% to 4.2% by fiscal 2027, he added. The company anticipates benefits from potential repo rate cuts but plans to pass these savings to customers, while leveraging its segment mix to enhance yields.
The company’s current credit cost is around 20 to 22 basis points. By fiscal 2027, credit costs are projected to stabilise at 25 bps, supported by the sizable and seasoned affordable and emerging books, Kousgi said. He clarified that LAP is not a new business, as PNB Housing has over 30 years of experience in this area, and the corporate segment will be carefully managed to minimise risks.
The company expects a return on assets of 2.5% to 2.6% by FY27, with credit costs remaining subdued through fiscal 2026 due to exhausted write-off pools, according to Kousgi. He negated concerns about downside risks, citing the company’s experience and disciplined approach to portfolio management.
Shares of PNB Housing Finance ended 4.7% higher at Rs 1,032.6 apiece on the NSE on Tuesday, while the benchmark Nifty 50 closed marginally higher by 0.03%.
