PNB Housing Finance Ltd. share price target

PNB Housing Finance's (PNBHF) 3QFY18 PAT grew at a robust 58% YoY toINR2.18b, led by strong AUM growth, improvement in margins, and lower C/I ratio. Disbursements more than doubled YoY to INR93b (off a low base). Consequently, AUM increased 53% YoY to INR577b - 5% ahead of our estimate of INR549b. AUM mix continues to inch closer towards non-core loans (LAP, construction finance, etc). Share of these loans increased 160bpQoQ and 400bp YoY to 42.8%. While calculated spreads (on AUM) came in sequentially flat at 2.08%, the management has lowered its spread guidance from 210-225bp earlier to195-210bp due to rising G-Sec yields. It has also guided to the following liability mix: Deposits - 25%, NCD- 45%, CP- 15-18%, Banks ??? 10%+, NHB ???5%.

PNB Housing Finance (PNBHF) is the fastest-growing and fifth-largest housing finance company in India. The companys outstanding AUM is pegged at INR512bn as on H1FY18 and it has ~5% market...

NIM for the quarter came in at 3.15% increasing by 44 Bps from 2.71% YoY. Company's disbursements increased by 44% to Rs 7,385 crore during Q2 FY17-18 from Rs 5107 crore during Q2 FY16-17. Disbursements towards housing loan accounted for 70.6% and non-housing loan at 29.4%. Disbursement for Q1 FY17-18...

PNB Housing Finance (PNBHF)'s operating performance remained strong in 2QFY18, with net profit up 51% YoY, driven by robust AUM growth of 47%. Disbursement growth came in at 45% YoY while the loan book increased 51%, driven by growth in the developer book (59% YoY/18% QoQ) and individual home loans (47% YoY/11% QoQ), while LAP book growth stood at 38% YoY/12% QoQ. Margins expanded 39bps YoY to 3.15% in 2QFY18, driven by a 94bps YoY decline in funding costs and a change in the loan mix towards developer book, LRD and Corporate Term Loan. PNBHF's asset quality remained stable with gross NPLs of 0.34%, while its coverage ratio stood at 24% (vs. 32% in 2QFY17). With aggressive lending...

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...

Piran Engineer - Research analyst (Piran.Engineer@MotilalOswal.com); +91 22 3980 4393 Alpesh Mehta - Research analyst (Alpesh.Mehta@MotilalOswal.com); +91 22 3982 5415 Investors are advised to refer through important disclosures made at the last page of the Research Report....

The Deposit portfolio grew by 35% to INR 10,025 crore as on 30th June, 2017 from INR 7,436 crore as on 30th June, 2016. Cost of funds decreased by 39 bps sequentially Rs 26,022 cr to 6.6%. Borrowings for this quarter were Rs.39564 cr vs. 35657 cr QoQ. Borrowings Rs 167 cr portfolio was majorly funded by NCDs (40.9%), Deposits(25.3%), Commercial paper...

PNB Housing Finance Ltd is the fifth largest HFC in India by loan portfolio as of September 30, 2015 with the second largest amount of public deposits in an HFC in India as of March 31, 2015. Incorporated in 1988, PNB Housing Finance Ltd, a subsidiary of Punjab National Bank offers housing loans to individuals and corporate bodies for the purchase, construction, extension or improvement of residential properties or for the purchase of residential plots, and nonhousing loans in the form of loans against property to property-owning customers through mortgages over their existing property and any additional security, if required. Company's target customers for housing loans are salaried customers, whose main source of income is salary from their employment, and self-employed customers, whose main source of income is their profession or their business. Visit chittorgarh.com for more detail. They also offer housing loans in the form of construction finance loans to real estate developers of residential housing. The company has Pan...

PNB housing has over 25 years of experience in the Indian housing finance industry. The company is fifth largest HFC in India by loan portfolio as of September 30, 2015 with the second largest amount of public deposits in an HFC in India as of March 31, 2015, according to the IMaCS Report. Issue PNB housing is also the fastest growing HFC among the leading HFCs in India as of March 31, 2015, according to the IMaCS Report, with our loan portfolio growing at a CAGR of 61.81% from QIB 39,696.63 million as of March 31, 2012 to 168,193.17 million as of March 31, 2015. As of March 31, 2016, the loan portfolio has grown to 271,772.68 million. The recent growth in loan portfolio and operations reflects the continued rapid growth in the housing finance industry in India, comNIB...

To augment the bank's capital base to meet its future capital requirements due to expected growth of the bank's assets. In addition, the listing of equity shares will enhance the visibility and...