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Informist, Friday, Jul. 31, 2026

 

By Priyasmita Dutta

 

NEW DELHI – Strong loan growth supported by healthy disbursements during the June quarter is expected to help PNB Housing Finance Ltd. offset the hit from lower write-backs, according to brokerages tracking the housing financier. The company is expected to report modest year-on-year growth in net profit, but a decline on a sequential basis as write-backs are likely to fall to nearly a third of the quarter-ago figure, brokerages said. 

 

The large housing finance company is expected to report a consolidated net profit of INR 5.58 billion for the June quarter, up nearly 5% on year, according to the average of estimates from four brokerages. Sequentially, however, the net profit is expected to fall 15%. In the June quarter last year, the lender had reported a net profit of INR 5.34 billion, and in the March quarter, its profit was INR 6.56 billion. 

 

The lowest estimate for net profit is INR 5.30 billion from Nirmal Bang Equities Pvt. Ltd., and the highest is INR 5.78 billion from Motilal Oswal Financial Services Ltd. Brokerage Nirmal Bang sees the housing financier's pre-provision profit rising 14% on year and 7% on quarter to INR 7.14 billion, while JM Financial Institutional Securities Pvt. Ltd sees it rising 8% on year. PNB Housing Finance will announce its financial results for the quarter on Tuesday.

 

Motilal Oswal and ICICI Securities Ltd. estimate PNB Housing's write-backs, or recoveries from earlier provisions, to be INR 529 million and INR 419 million, respectively. In the June quarter a year ago, PNB Housing's write-back totalled INR 562 million, and in the quarter ended March, it had totalled INR 1.76 billion. According to Motilal Oswal, provision write-backs during the quarter are likely to be from recoveries in both retail and corporate written-off pools.

 

In the quarter ended June, brokerages Nirmal Bang and Motilal Oswal expect the company's loans to have grown 14.7–16% on year, and JM Financial expects disbursements to have grown 35% on year. PNB Housing Finance is India's third-largest housing finance company by loan assets and is promoted by Punjab National Bank. Its wholly-owned subsidiary, PHFL Home Loans and Services Ltd., acts as its in-house sales and distribution channel. PNB Housing Finance is also a deposit-taking housing finance company. 

 

ICICI Securities expects PNB Housing's assets under management to have grown 3% sequentially by the end of June, whereas JM Financial sees it up 15% on year. At the end of the March quarter, assets under management of the financier had increased 13% on year to INR 909.21 billion, with its retail loans growing 16% on year to INR 869.46 billion. Retail loans made up 99.5% of its total loan book. 

 

PNB Housing's net interest income during the June quarter is seen rising 11% on year and 2.4% on quarter to INR 8.27 billion, according to the average of estimates from four brokerages. The lowest estimate for the housing finance company's net interest income is INR 8.05 billion by Nirmal Bang, while the highest estimate is INR 8.56 billion by ICICI Securities. 

 

Brokerages also estimate the company's net interest margin to be around 3.6–3.7%, broadly the same level as 3.69% at the end of the March quarter. "Margins are likely to remain range-bound, while credit costs are expected to inch up for a few HFCs (housing finance companies)," ICICI Securities said in a report. "At PNB HF (PNB Housing), however, credit costs are likely to remain in negative territory, albeit with a lower quantum of recoveries," the report added. 

 

The housing finance company had reported a negative credit cost of 0.45% at the end of March, according to its investor presentation. Going ahead, brokerages will monitor the management's comments on PNB Housing's credit costs, along with its view on asset quality of the retail loan book and net interest margin.

 

Of the six brokerage reports on the financier available with Informist, five have a 'buy' call on the stock with an average target price of INR 1,203, almost 9% higher than its current market price. One brokerage has a 'hold' rating. At 1045 IST, shares of the housing financier were trading at INR 1,033 on the National Stock Exchange, almost flat from the previous close. Since reporting its March quarter results on Apr. 20, shares of the company have risen over 13%.

 

Following are the June quarter earnings estimates for PNB Housing Finance from four brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net interest income	Net profit
Motilal Oswal Financial Services Ltd.	8.186	5.784
ICICI Securities Ltd.	8.564	5.632
JM Financial Institutional Securities Pvt Ltd.	8.301	5.626
Nirmal Bang Equities Pvt Ltd.	8.046	5.297
Average	8.274	5.585

 

End

 

Edited by Himanshi Gupta

 

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