PNB Housing Forecasted to Reach Rs 1,260 by Motilal Oswal

PNB Housing Finances Report Strong Q4FY26 Results

Motilal Oswal's research report highlights significant growth in PNB Housing's (PNBHF) financial performance for the fourth quarter of FY26. The company's Profit After Tax (PAT) witnessed a year-over-year (YoY) growth of approximately 19% to reach ₹6.6 billion, surpassing estimates by 14%. This impressive growth also contributed to a 18% YoY increase in FY26 PAT to ₹22.9 billion.

The report also notes that Net Interest Income (NII) rose by approximately 11% YoY to ₹8.1 billion, meeting expectations. However, Other Income declined by 10% YoY to ₹1.2 billion. Operating Expenses (Opex) saw a significant increase of 17% YoY to ₹2.5 billion, which was higher than the estimated ₹2.3 billion.

Key Performance Indicators (KPIs)

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PNB Housing's Profit Before Provision (PPoP) grew by approximately 5% YoY to ₹6.8 billion in the fourth quarter, meeting expectations. The company's FY26 PPoP also witnessed a significant growth of 11% YoY to ₹25.8 billion. The report highlights that Credit Costs (net of recoveries) resulted in a provision write-back of ₹1.8 billion, which was higher than expected. This led to a net credit cost of -83 basis points (bps), compared to -20bps in the previous quarter and -35bps in the corresponding period last year.

Outlook and Recommendations

Motilal Oswal expects PNB Housing to achieve a Compound Annual Growth Rate (CAGR) of 19% in loans and 13% in PAT over FY26-28E. The company's Return on Assets (RoA) and Return on Equity (RoE) are expected to reach 2.4% and 12.8%, respectively, in FY28E. Based on these expectations, Motilal Oswal reiterates a BUY recommendation with a revised Target Price of ₹1,260, based on 1.4 times FY28E Book Value Per Share (BVPS).

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