Motilal Oswal has a neutral call on with a target price of Rs 400. The current market price of PNB Housing Finance is Rs 379.55.
PNB Housing Finance Ltd, incorporated in the year 1988, is a Mid Cap company with a market cap of Rs 6342.87 Crore, operating in NBFC sector.
PNB Housing Finance's key Products/Revenue Segments include Interest, Income From Financial Services, Fees & Commission Income, Income From Sale Of Share & Securities and Dividend for the year ending 31-Mar-2020.
Investment Rationale
According to Motilal Oswal, over the past year, the company has consciously slowed its loan growth and focused on higher down-selling to address the issue of high leverage. Leverage has now fallen to levels of ~7x and the decline is likely to continue. From FY23, the company would be in a position to grow its loan book by 9–11 per cent YoY, said Motilal Oswal. It has front-loaded most of the asset quality-related pains. Hence, Motilal increases its FY22E EPS estimates by 17 per cent to factor in lower provisions. The company should deliver 14–15 per cent RoE in FY22E/FY23E; however, asset quality risks from the second wave of the pandemic persist. Therefore, Motilal maintains a neutral call, with a target price of Rs 400/share (0.6x FY23E BVPS).
Financials
For the quarter ended 31-03-2021, the company has reported a Consolidated Total Income of Rs 1833.90 Crore, down 3.29 per cent from last quarter's Total Income of Rs 1896.35 Crore and down 6.04 per cent from last year same quarter's Total Income of Rs 1951.84 Crore. Company has reported net profit after tax of Rs 127.03 Crore in latest quarter.
Promoter/FII Holdings
Promoters held 32.7 per cent stake in the company as of Dec 30, 2020, while FIIs held 24.6 per cent, DIIs 3.5 per cent and public and others 39.3 per cent.
PNB Housing Finance Ltd, incorporated in the year 1988, is a Mid Cap company with a market cap of Rs 6342.87 Crore, operating in NBFC sector.
PNB Housing Finance's key Products/Revenue Segments include Interest, Income From Financial Services, Fees & Commission Income, Income From Sale Of Share & Securities and Dividend for the year ending 31-Mar-2020.
Investment Rationale
According to Motilal Oswal, over the past year, the company has consciously slowed its loan growth and focused on higher down-selling to address the issue of high leverage. Leverage has now fallen to levels of ~7x and the decline is likely to continue. From FY23, the company would be in a position to grow its loan book by 9–11 per cent YoY, said Motilal Oswal. It has front-loaded most of the asset quality-related pains. Hence, Motilal increases its FY22E EPS estimates by 17 per cent to factor in lower provisions. The company should deliver 14–15 per cent RoE in FY22E/FY23E; however, asset quality risks from the second wave of the pandemic persist. Therefore, Motilal maintains a neutral call, with a target price of Rs 400/share (0.6x FY23E BVPS).
Financials
For the quarter ended 31-03-2021, the company has reported a Consolidated Total Income of Rs 1833.90 Crore, down 3.29 per cent from last quarter's Total Income of Rs 1896.35 Crore and down 6.04 per cent from last year same quarter's Total Income of Rs 1951.84 Crore. Company has reported net profit after tax of Rs 127.03 Crore in latest quarter.
Promoter/FII Holdings
Promoters held 32.7 per cent stake in the company as of Dec 30, 2020, while FIIs held 24.6 per cent, DIIs 3.5 per cent and public and others 39.3 per cent.
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