PNB Housing Finance Ltd (BOM:540173) Q2 2025 Earnings Call Highlights: Robust Retail Growth and ...

• Retail Loan Book Growth: 16.2% to INR 67,970 crore as of September 30, 2024.

• Corporate Loan Book: INR 1,531 crore as of September 30, 2024.

• Total Loan Book: INR 69,501 crore.

• Affordable Segment Loan Book Growth: 300% year-on-year to INR 2,959 crore.

• Emerging Market Segment Loan Book Growth: 22% year-on-year to INR 12,545 crore.

• Disbursement Growth: 28.2% year-on-year in Q2 FY2025 to INR 5,341 crore.

• Net Interest Margin (NIM): 3.68% in Q2 FY2025.

• Gross Non-Performing Assets (GNPA): Improved to 1.24% from 1.35% in the previous quarter.

• Cost of Borrowing: Reduced by 8 basis points to 7.84% in Q2 FY2025.

• Return on Assets (ROA): Improved to 2.54% in Q2 FY2025.

• Return on Equity (ROE): 12% in Q2 FY2025.

• Capital Adequacy Ratio: 29.16% with Tier 1 at 20.81%.

• Branch Network: 303 branches with plans to open 15 more in the current financial year.

• Warning! GuruFocus has detected 2 Warning Signs with BOM:540173.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• PNB Housing Finance Ltd (BOM:540173) reported a strong financial performance with a 28% growth in disbursements and a 16.2% growth in the retail loan book.

• The company achieved a significant milestone by crossing the 3,000 crore mark in the affordable loan segment, showing a remarkable growth of 300% year-on-year.

• The net interest margin improved to 3.68% during the quarter, driven by a reduction in the cost of borrowing to 7.84%.

• The company's asset quality improved, with the gross non-performing assets (GNPA) ratio decreasing to 1.24% from 1.35% in the previous quarter.

• PNB Housing Finance Ltd (BOM:540173) plans to expand its branch network by opening 15 new branches, focusing on affordable and emerging markets, which is expected to drive future growth.

• The corporate loan book has been declining, which has impacted the overall interest income growth, despite the strong performance in the retail segment.

• Operating expenses increased by 19% year-on-year, primarily due to branch expansion, which could pressure profitability if not managed effectively.

• The company faces challenges in maintaining its net interest margin above 3.5% due to potential rate cuts and competitive pressures in the prime segment.

• There is a significant reliance on the affordable and emerging market segments for growth, which may expose the company to higher credit risks.

• The incremental yield in the affordable segment, although improved, may face pressure from competitive pricing and potential interest rate cuts in the future.