Housing finance companies are returning to good days. PNB Housing Finance seems to be benefiting from this. It is the third largest company in the country to provide housing loan. It has the support of Punjab National Bank (PNB). PNB holds 28 per cent stake in it. PNB Housing Finance gets the benefit of PNB’s comprehensive branch network. Especially through the branch of PNB, it has access to remote areas of the country.
Good loan growth from rival companies
Loan dispenser growth of PNB housing has been higher than other housing finance companies. This trend is expected to continue further. The company is trying to maintain its asset quality. Due to this, the growth of the loanbook has been slightly dull. However, overall loan growth has reached a new height. It crossed 75,000 crores in FY25. The company is focusing on both Employable and Emerging Markets. They hold up to 50 per cent stake in overall retail disburses.
Company performance in June.
The growth of the Affordable loan segment has been tremendous. This trend is expected to continue even further. PNB Housing Finance has made changes in its prime branch in some states with high earnings. It has benefited. The growth in the June quarter has been good and the ability to make profits has also increased. However, in the first quarter, some particular segments show a seasonal effect on loan growth. The company expects good growth in the new segment. The company is increasing the number of branches. He will also benefit from this.
Plan to open 40-50 new branch every year
PNB Housing Finance has planned to open 40-50 new branch every year to increase its presence in the high growth market. The company has set a target to increase the total number of branches from 356 to 500. After the decline in asset quality, the company has reduced the focus on the corporate loan book. This has given good improvement in Gross Non-Performing Asset (GNPA) ratio.
Should you invest?
PNB Housing Finance has a challenge to achieve good growth by maintaining asset quality. The company has pricing competitive to increase its penetration in the Employable Loan Segment. In such a situation, the company will have to focus on increasing the productivity. The shares of PNB Housing Finance have been recreated due to better performance on almost all fronts. Despite this, PNB Housing Finance shares do not have high prices than competitive companies. Given the possibilities of growth, the valuation of the stock seems correct.