Shares of PNB Housing Finance surged 8.5 per cent to Rs 688 per share on the BSE in Monday's intra-day trade after it fully recovered its large corporate non-performing account (NPA) of Rs 784 crore (~1.3 per cent of loan assets as of June 30, 2023).
So far this calendar year, the stock has rallied 56 per cent, as against a 6 per cent rise in the S&P BSE Sensex. Earlier, the stock had touched a 52-week high of Rs 699 per share on July 25, 2023.
As of June 30, 2023, the gross NPA of the company stood at Rs 2,270 crore and the loan asset was Rs 60,395 crore, said the management in an exchange filing on August 19.
"The corporate NPA was resolved through asset reconstruction company (ARC) sale under swiss challenge method, as per the Reserve Bank of India Directions, 2021," they added.
In the recently concluded June quarter, the company's profit-after-tax (PAT) grew 46 per cent year-on-year (YoY), on the back of margin expansion. Assets under management (AUM) growth, however, remained muted (2.3 per cent YoY).
While the company's retail loans grew 8 per cent YoY, corporate loan assets declined 66 per cent YoY to Rs 3.4 crore.
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Asset-quality wise, the company's gross NPA declined 3.7 per cent on a quarter-on-quarter basis (QoQ), whereas retail gross NPA slipped 8 basis points (bps) QoQ to 2.4 per cent.
Going forward, the management re-iterated that advances growth will be ~17-18 per cent and overall disbursement growth will be ~22 per cent. Moroever, they guided sustainable spread and net interest margin (NIM) at 2.5 per cent and 3.5 per cent, respectively.
Analysts at Nirmal Bang Institutional Equities remain bullish on the counter, sharing a target price of Rs 795 apiece.
"We believe that the new initiatives and improving parameters are likely to aid growth going forward. We expect return on assets (RoA) to grow 1.8 per cent in FY24-25 from 1.2 per cent/1.6 per cent in FY22/FY23," the brokerage firm added in a result review note.