Motilal Oswal is bullish on PNB Housing Finance has recommended buy rating on the stock with a target price of Rs 1100 in its research report dated January 24, 2019.
Motilal Oswal's research report on PNB Housing Finance
PNB Housing Finance’s (PNBHF) 3QFY19 PAT increased 32% YoY to INR3.0b (14% beat). The beat was largely driven by higher-than-expected upfront income on loan assignment and MTM on the treasury book. Despite a tough and volatile environment, PNBHF disbursed INR93b worth of loans (+1% YoY). Repayment rate (annualized) continues to decline and hit a multi-quarter low of 21%, largely due to lower balance transfers in our view. As a result, AUM grew a healthy 38% to INR797b.
Outlook
However, spreads are under pressure and it is likely to sustain over the medium term. We upgrade FY19/20E EPS estimates by 5-6% to account for higher assignment income. Maintain Buy with a TP of INR1,100 (2.0x Dec 2020E BVPS).
For all recommendations report, click here
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