PNB Housing Shares Jump 10% on Strong Q4; Brokerages Stay Positive

Strong Financial Performance Triggers Market Rally in Early Trade

Shares of PNB Housing Finance soared 10% in early trade on Tuesday, reflecting strong investor confidence following the company’s robust performance in the March quarter of FY25. The housing finance company reported a 25% year-on-year increase in net profit, reaching ₹550 crore for Q4FY25. The surge in earnings sent the stock to an intraday high of ₹1,084.85 before settling 7.17% higher at ₹1,057 on the NSE by 11:30 AM.

Highlights:

• Net profit rose 25% YoY to ₹550 crore in Q4FY25.

• Stock rallied 10% in early trade, hitting ₹1,084.85 before easing to ₹1,057.

• Shares reflect investor optimism post strong quarterly earnings.

Net Interest Income and Margins Show Consistent Growth

The company’s net interest income (NII) climbed 16.2% to ₹734 crore for the quarter ended March 31, 2025. Additionally, the net interest margin (NIM) improved to 3.75%, up from 3.65% in Q4 FY24, indicating improved lending efficiency and cost management. The steady improvement in core income has underpinned the company’s ability to enhance profitability in a competitive market.

Highlights:

• NII rose 16.2% YoY to ₹734 crore.

• NIM improved to 3.75% in Q4FY25, compared to 3.65% in Q4FY24.

• Margin expansion signals enhanced efficiency and revenue generation.

CEO Commentary: Retail Book and Asset Quality Drive Growth

Girish Kousgi, Managing Director & CEO of PNB Housing Finance, highlighted the company’s ability to outperform guidance across key metrics in FY25. He noted that the retail loan book grew by 18.2% year-on-year to ₹74,802 crore, largely driven by growth in the affordable and emerging markets segments. Kousgi also emphasized a 35 basis points increase in Return on Assets (RoA), citing strong business fundamentals and financial discipline.

Highlights:

• Retail loan book expanded 18.2% YoY to ₹74,802 crore.

• Growth driven by affordable and emerging market segments.

• RoA improved by 35 bps for FY24-25.

Brokerages Bullish on FY26 Outlook Despite Competitive Risks

Brokerages responded positively to PNB Housing Finance’s Q4 results. Motilal Oswal reiterated its “Buy” rating with a target price of ₹1,230, citing broad-based strength in loan growth, asset quality, and profitability. The brokerage acknowledged that margin expansion may face headwinds from rising competition in the mortgage segment and potential stress in the affordable loan book.

Meanwhile, HDFC Securities retained its “Add” rating and revised the target price to ₹1,025. Analysts at HDFC attributed the earnings beat to lower-than-expected provisioning, higher other income, and resilient loan growth amid sluggish housing demand. The firm also revised its FY26 and FY27 earnings estimates upward by 3.5% and 1.4%, respectively.

Highlights:

• Motilal Oswal: Buy rating, target price ₹1,230.

• HDFC Securities: Add rating, revised target ₹1,025.

• Upward earnings revision for FY26/FY27 by HDFC Securities.

• Risks cited include mortgage competition and asset quality challenges in emerging segments.

Supportive Momentum Amid Broader Market Volatility

With the broader markets trading with mixed sentiment on Tuesday, PNB Housing Finance stood out as one of the session’s top performers. The continued interest from institutional investors and positive brokerage commentary suggest a supportive momentum in the near term. However, analysts remain cautious of aggressive mortgage competition and the evolution of credit costs in new lending segments.

Highlights:

• Stock shows strong momentum amid market volatility.

• Institutional support and positive analyst commentary bolster investor confidence.

• Competitive mortgage environment and credit risks may affect future margins.