PNB Housing Finance’s net interest income increased 10.1% to ₹767 crore but was 1.9% below estimates.
Its pre-provision operating profit (PPOP) was up 8.3% to ₹628 crore from the previous year but was 5.6% below estimates. This is because other income grew just by 8% annually and on the expense side, the employee cost increased 36% from the previous year.
Its profit after tax (PAT) increased 7.7% to ₹520 crore annually but was 3.5% below estimates.
Overall, the company’s NII was a bit lower compared to estimates.
PNB Housing Finance’s loan growth was at 14% and its retail growth was at 16% at ₹81,931 crore from ₹70,675 crore in the previous year. This is lower in comparison to the management’s guidance of 17% to 18% retail growth for the full financial year.
PNB Housing Finance’s net interest margins (NIMs) contracted by 4 basis points sequentially to 3.63% from 3.67%.
The management said there will be some pressure on NIMs, which will be mitigated through cost of funds (CoF). It has continued to maintain its NIM guidance of 2.6%-2.7% for FY26. It added that it will revisit the guidance for the next year.
Another major issue was PNB Housing Finance’s disbursement growth, which was at 15.6% at ₹6,217 crore from ₹5,380 crore in the previous year. This was lower than estimates. Disbursements in the affordable segment was down 15% annually, which analysts see as a big negative.
The management expects affordable and emerging share to be 45% – 50% from the current 39%.
The PNB Housing Finance management in its post-earnings conference call said the decline in affordable disbursements is due to certain pockets that were impacted due to the government ordinance. It expects 20%-25% sequential growth from the fourth quarter.
The management has maintained its guidance on return on assets of 2.6%-2.7%.
However, concerns remain due to pressures on NIMs, setback in affordable housing disbursement and 20 basis points normalised credit cost for FY27 compared to negative in FY26.
Shares of PNB Housing Finance are trading 10% lower at ₹837.5. The stock is down close to 25% from its 52-week high of ₹1,141.9.
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