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ICICI Securities has buy call on with a target price of Rs 678. The current market price of PNB Housing Finance Ltd. is Rs 630.2. Time period given by analyst is one year when PNB Housing Finance Ltd. price can reach defined target.
PNB Housing Finance Ltd., incorporated in the year 1988, is a Mid Cap company (having a market cap of Rs 8845.01 Crore) operating in NBFC sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 1833.90 Crore, down -3.29 % from last quarter Total Income of Rs 1896.35 Crore and down -6.04 % from last year same quarter Total Income of Rs 1951.84 Crore. Company reported net profit after tax of Rs 127.03 Crore in latest quarter.
Investment Rationale
PNB Housing Finance’s (PNBHF) Board approval for preferential issue reduces the overhang on much awaited equity infusion and/or stake sale. It also brings with it a few notable positive triggers: 1) Carlyle raising its stake to 50% and PNB’s stake to be down to 20% (not expected to go below this), putting to rest the overhang of any further stake sale in the interim; 2) Mr. Aditya Puri’s nomination to the Board will lend considerable credence to the company’s business transition and strategic intentions; 3) capital buffer (CAR of >28%) is enhanced to adequately face the potential stress due to covid disruption, and gradually improve visibility on rating upgrade. Strategically, business transformation is underway with new agenda to target mass retail housing, build the high-yield Unnati portfolio and drive efficiency through cost management. However, in the interim transitioning phase, growth and RoE will be modest. Strengthening of the Board, management, governance and risk management, coupled with scarcity premium, can drive rerating to 1.2x FY23E book. Upgrade to BUY with a revised target price of Rs678 (earlier: Rs385). Key risks: 1) Business transitioning taking longer than expected; and 2) Corporate book stabilisation and resolution of stress would be key monitorable.
Promoter/FII Holdings
Promoters held 32.6 per cent stake in the company as of March 31, 2021, while FIIs held 24.7 per cent, DIIs 3.1 per cent and public and others 39.6 per cent.
(Views and recommendations given in this section are the analysts' own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
PNB Housing Finance Ltd., incorporated in the year 1988, is a Mid Cap company (having a market cap of Rs 8845.01 Crore) operating in NBFC sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 1833.90 Crore, down -3.29 % from last quarter Total Income of Rs 1896.35 Crore and down -6.04 % from last year same quarter Total Income of Rs 1951.84 Crore. Company reported net profit after tax of Rs 127.03 Crore in latest quarter.
Investment Rationale
PNB Housing Finance’s (PNBHF) Board approval for preferential issue reduces the overhang on much awaited equity infusion and/or stake sale. It also brings with it a few notable positive triggers: 1) Carlyle raising its stake to 50% and PNB’s stake to be down to 20% (not expected to go below this), putting to rest the overhang of any further stake sale in the interim; 2) Mr. Aditya Puri’s nomination to the Board will lend considerable credence to the company’s business transition and strategic intentions; 3) capital buffer (CAR of >28%) is enhanced to adequately face the potential stress due to covid disruption, and gradually improve visibility on rating upgrade. Strategically, business transformation is underway with new agenda to target mass retail housing, build the high-yield Unnati portfolio and drive efficiency through cost management. However, in the interim transitioning phase, growth and RoE will be modest. Strengthening of the Board, management, governance and risk management, coupled with scarcity premium, can drive rerating to 1.2x FY23E book. Upgrade to BUY with a revised target price of Rs678 (earlier: Rs385). Key risks: 1) Business transitioning taking longer than expected; and 2) Corporate book stabilisation and resolution of stress would be key monitorable.
Promoter/FII Holdings
Promoters held 32.6 per cent stake in the company as of March 31, 2021, while FIIs held 24.7 per cent, DIIs 3.1 per cent and public and others 39.6 per cent.
(Views and recommendations given in this section are the analysts' own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
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