PNB Housing delivers steady Q2; analysts bullish on growth, margin outlook

On the bourses around 9:30 AM, PNB Housing share was trading flat at ₹927.45 apiece. By comparison, BSE Sensex was trading marginally higher at 84,792.25 levels.

PNB Housing Finance reported a broadly in-line second quarter results for FY26, with both Motilal Oswal Financial Services and JM Financial maintaining their ‘Buy’ ratings on the PNB Housing stock. 

 

The brokerages cited consistent retail growth, stable asset quality, and continued recoveries from the written-off pool as key positives, even as near-term NIM compression and rising delinquencies in the affordable segment warrant monitoring.

 

On the bourses around 9:30 AM, PNB Housing Finance share was trading flat at ₹927.45 apiece. By comparison, BSE Sensex was trading marginally higher at 84,792.25 levels.  READ LATEST STOCK MARKET UPDATES LIVE

Motilal Oswal: In-line quarter; PAT beat aided by ECL release

 

Motilal Oswal noted that PNB Housing delivered a steady operational performance in Q2FY26, with net profit rising 24 per cent Y-o-Y to ₹580 crore, about 7 per cent above estimates, mainly driven by an Expected Credit Loss (ECL) release of ~₹70 crore from the foreclosure of a standard corporate account. Adjusted for this one-off, earnings were in line with expectations.

 

Net interest income (NII) grew 13 per cent Y-o-Y to ₹750 crore, while Net Interest Margin (NIM) contracted 7 basis points (bps) Q-o-Q to 3.67 per cent due to a 10bps PLR cut and lower investment yields. Other income rose 14 per cent Y-o-Y to ₹110 crore, and operating expenses increased a modest 7 per cent Y-o-Y. Pre-provision operating profit (PPOP) was up 16 per cent Y-o-Y to ₹650 crore.

 

Credit costs turned into a net write-back of ₹110 crore, better than expectations, thanks to sustained recoveries from both retail and corporate written-off pools. Total GNPA/NNPA ratios remained stable at 1.04 per cent/0.7 per cent, while retail GNPA stood at 1.05 per cent and corporate GNPA remained nil.

 

Motilal Oswal highlighted that PNB Housing’s retail loan book grew 17 per cent Y-o-Y, with the company deepening its presence in the affordable and emerging segments. While this enhances yields, the brokerage cautioned that delinquencies could rise as the book seasons in informal and self-employed categories. The firm expects the company to resume corporate disbursements in H2FY26, which should aid yields and margins.

 

The brokerage also noted that the CEO selection process is in its final stages, with a formal announcement expected soon. The existing leadership team has maintained operational stability during the transition. Motilal Oswal expects PAT to grow 14 per cent Y-o-Y in H2FY26, and models loan/PAT CAGR of 18 per cent/16 per cent over FY25-28E, with RoA/RoE of 2.5 per cent/13.5 per cent by FY28. It reiterated a ‘Buy’ rating with a target price of ₹1,080, valuing the stock at 1.2x Sep’27E BVPS.  ALSO READ | What should investors do with Jubilant Ingrevia shares post Q2 results?

JM Financial: Recovery gains drive earnings; affordable segment in focus

 

JM Financial also maintained a ‘Buy’ rating on PNB Housing, stressing the company’s resilient performance despite NIM pressure. The brokerage reported that PAT grew 24 per cent Y-o-Y and 9 per cent Q-o-Q, about 5 per cent above its estimates, led by recoveries of ₹59 crore million from the written-off pool and ₹70 crore from a corporate account.

 

Annualised RoA stood at a robust 2.7 per cent, while NII rose 13 per cent Y-o-Y. NIMs fell 7bps Q-o-Q, in line with the impact of rate adjustments. Loan assets expanded 15 per cent Y-o-Y and 3 per cent Q-o-Q, driven by continued traction in the affordable/emerging housing segment, which grew 14 per cent Y-o-Y and 6 per cent Q-o-Q.

 

While the overall GNPA ratio improved slightly to 1.04 per cent, JM Financial flagged that the 30+ DPD in the affordable book increased as the portfolio matured. Disbursement growth moderated to 12 per cent Y-o-Y (from 13 per cent in Q1), which could temper AUM growth in the near term. However, the management expects recovery momentum to persist over the next few quarters, supported by an outstanding recovery pool of ₹10 billion.

 

JM Financial believes corporate loan disbursals and potential interest rate revisions could help offset NIM compression going ahead. It values the stock at 1.4x FY27E BV, implying a target price of ₹1,150, and sees current valuations of 1.1x FY27E P/BV as attractive for investors seeking 2 per cent+ RoAs.  ALSO READ | Weak Q2 fails to shake analysts' faith in Supreme Industries; here's why

PNB Housing outlook

Analysts agree that PNB Housing is on a solid footing, supported by a steady retail growth engine, improving profitability, and a disciplined recovery track record. 

 

While short-term NIM pressures and affordable-segment slippages are key monitorables, analysts expect the company’s long-term earnings trajectory to remain robust once corporate lending resumes and the new CEO takes charge.