Target: ₹437.

CMP: ₹360.15.

PNB Housing Finance’s (PNBHFL) focus has been on increasing the business on the one hand while repositioning it on the other.

While the increase in population density, especially in urban areas, has increased the demand for flats, it is expected to drive the demand for independent homes, often self-constructed, in the smaller cities.

What also works favourably for companies like PNBHFL is that the average age of borrowers, declining over the years, was estimated at 33 years in FY2020. CRISIL Research expects this figure to decline further to 30 years in FY2025.

The implementation of the Real Estate (Regulation and Development) Act in 2016 has had a direct impact on the supply-demand dynamics in the real estate sector, thereby impacting the home-lending sector too.

The company hopes to enhance its digital footprints in underwriting and is in the process of implementing straight through processing for the salaried segment through a rule-based engine and enhancing core capabilities for the self-employed segment.

We expect AUM growth to moderate and be in the range of 8-10 per cent over FY23-24 on account of the shrinking wholesale loan book and credit costs to remain elevated. PNBHFL’s cautious stance on lending towards corporates and continued focus on maintaining excess liquidity provides comfort.