PNBHOUSING

: AAA Rating, ₹1 Trillion AUM Ambition by FY27

has regained stability after a leadership vacuum rattled investors earlier this year. The appointment of Ajai Kumar Shukla as MD & CEO on 18 December restored confidence, with the stock recovering most of its losses since August. Fundamentals have strengthened, with improved asset quality, stable margins, and robust growth in affordable housing. While competition in premium housing and rising risks in emerging segments remain challenges, valuations appear reasonable, supported by strong earnings visibility and a strategic pivot toward higher-yield segments. The sudden resignation of Girish Kousgi in July led to an 18% stock slump. Shukla’s appointment, backed by three decades of mortgage experience, restored investor confidence. The stock now trades at ₹966, just 2% below pre-resignation levels. - RoE: 13% in Q2FY26, highest since FY21. - RoA: Improved to 2.73%, up 19 bps YoY. - Stage-3 assets: Down sharply to 1% gross and 0.7% net, from 6.4% and 4.3% in Q1FY23. - Credit costs: Negative since FY25, aided by provision write-backs. - NIM: Stable at 3.7%, supported by lower borrowing costs. Prime housing remains 60% of AUM, underpinning asset quality. Affordable and emerging segments contributed 50% of disbursements in Q2FY26, with affordable housing AUM growing 121% YoY. Management guides for 17–18% AUM growth annually, targeting ₹1 trillion AUM by FY27. Affordable housing offers higher yields but carries greater risk. Self-employed borrowers rose to 43% of the segment, with 20% classified high risk. Gross NPA in affordable housing ticked up to 0.51%, and early-bucket delinquencies rose to 1.40%, though still below the 3.7% industry average. India Ratings upgraded PNB Housing to AAA in November. ICICI Securities expects RoA to moderate to 2.5% in FY26 and 2.2% in FY27 as provision write-backs fade. At 1.17x FY27 book value, valuations remain supportive, with affordable housing growth cushioning margin pressures.