Buy PNB Housing; target of Rs 1015: Motilal Oswal

Motilal Oswal's research report on PNB Housing

PNBHF’s 4QFY24 PAT grew ~57% YoY to ~INR4.4b (~20% beat), driven by NIM expansion of ~15bp QoQ. This NIM expansion, despite a sequential moderation in yields, was aided by 1) the absence of any one-offs unlike the previous quarter, and 2) stable CoB. NII rose ~7% YoY to ~INR6.2b due to a gradual shift in mix toward retail.4QFY24 disbursements grew 24% YoY to ~INR55.8b (+35% QoQ). Retail disbursements grew 24% YoY to INR55.4b (+35% QoQ). Affordable segment contributed ~10% to retail disbursements in FY24. Total loan book grew ~10% YoY to ~INR653.6b. However, retail loans grew 14% YoY.

Outlook

We expect PNBHF to deliver a CAGR of 17%/23% in AUM/PAT over FY24- FY26 and ~2.4%/13% RoA/RoE in FY26. Maintain BUY with a revised TP of INR1,015 (based on 1.4x FY26E BVPS).