MOSL: PNB HOUSING FINANCE (Buy)-Growth story continues
​PNB Housing Finance: Growth story continues
(PNBHF IN, Mkt Cap USD3.6b, CMP INR1394, TP INR1750, 25% Upside, Buy)
- PNB Housing Finance’s (PNBHF) 2QFY18 PAT grew robustly by 51% YoY to INR2.08b, led by its strong AUM growth, YoY improvement in margins and lower C/I ratio (albeit off a high base).
- Disbursements grew 45% YoY to INR74b. While this is certainly a very strong performance, it was a tad lower than disbursements in 1QFY18, suggesting some impact of RERA, and possibly GST. Generally, the second quarter is seasonally strong in terms of disbursements for an HFC.
- AUM growth of 47% YoY was in line with estimates. The mix has remained largely stable on both QoQ and YoY basis.
- C/I ratio (calculated) declined over 1,200bp YoY and 160bp QoQ to 23%. The sequential improvement is commendable, in our view. One of the key factors driving this is improving employee productivity. As per company disclosures, both disbursements/employee and loans outstanding/employee have increased at ~20% CAGR over the past two years (note that this number does not account for off-roll sales staff). We believe continued operating leverage is key to RoA/RoE improvement, and thus, for valuations to sustain.
PNB Housing Finance Limited (PNBHFL) is an India-based housing finance company. The Company provides housing loans to individuals and corporate bodies for construction, purchase, and repair and up gradation of houses. It also provides loans for commercial space, loan against property and loan for purchase of residential plots. It provides home loans, which include home purchase loans, home extension loans, home construction loans, home improvement loans, residential plot loans and loans for non-resident Indians (NRIs). The Company also provides non-home loans, which include commercial property loans, loan against property (LAP), loan for purchase of non-residential premises (NRP) and lease rental discounting (LRD). The Company also offers construction finance to the real estate developers. In addition, PNBHFL offers fixed deposit products for retail investors. The Company has around 38 branches supported by around 16 underwriting hubs.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.