At a Glance
After years of playing musical chairs with NPAs and promoter exits, PNB Housing Finance seems to have found some stability. With FY25 profits at ₹1,949 Cr, financing margins at 36%, and gross NPAs now just 1.08%, the company is finally back in the housing finance game. But can you trust a stock where promoters are slowly ghosting?
📦 Act 1: What Does PNB Housing Actually Do?
Think of it as your classic “Ghar ka sapna, EMI ka kabza” model:
- Home loans, LAP (loan against property), NRI loans
- Commercial property loans and plot financing
- Services both salaried and self-employed customers
It was once among the top 5 housing finance players before NPAs and PSU lethargy got in the way.
📈 Act 2: FY25 Numbers – “Beta, ab aage badho”
Financials That Finally Make You Say “Waah”:
| Metric | FY25 | YoY Growth |
|---|---|---|
| Net Profit | ₹1,949 Cr | ↑28% |
| Revenue | ₹7,633 Cr | ↑9% |
| Financing Profit | ₹2,523 Cr | ↑25% |
| Net NPA | 0.69% | Best in a decade |
| Financing Margin | 36% | Highest ever |
🔧 From 7.6% Gross NPA in FY22 → 1.08% in FY25
💰 From ₹822 Cr PAT in FY22 → ₹1,949 Cr in FY25
📊 From 17% Financing Margin in FY22 → 36% now
👏 Massive operational turnaround. Let’s give the credit card a slow clap.
🧾 Act 3: Balance Sheet – Less Scary Than Before!
| FY25 Snapshot | Value |
|---|---|
| Borrowings | ₹62,360 Cr |
| Reserves | ₹16,574 Cr |
| Book Value | ₹648 |
| Debt/Equity | ~3.5x (okay for HFCs) |
| Equity Capital | ₹260 Cr (steady) |
💡 Key Callout: Operating cash flows still negative in FY25 (₹8,120 Cr) — but largely due to housing disbursement scale-up, not mismanagement.
🔥 Act 4: Stock Pe Halke Se Nazariya
| Metric | Value |
|---|---|
| CMP | ₹1,050 |
| 52W High/Low | ₹1,202 / ₹741 |
| P/E | 14x |
| P/B | 1.6x |
| Market Cap | ₹27,300 Cr |
| Dividend Yield | 0.00% (paisa kama liya, par denge nahi) |
🤔 Stock Up 57% in 3 Years – Still Room to Run?
Yes, especially when you look at:
- LIC Housing: 6x P/E, slow growth
- Aavas: 25x P/E, slower profit growth than PNBHF
- Aptus: 21x P/E, smaller book, higher ROE
PNB Housing is sitting in the sweet middle of “cheap-ish” valuation and “mid-sized” growth.
🧠 Act 5: Red Flags & Green Lights
✅ Green Lights
- Net NPA = 0.69% → finally “clean” loan book
- 5-year PAT CAGR = 23%
- Strong quarterly run-rate: ₹567 Cr profit in Q4 FY25 alone
- Financing Margin = 36% (Aptus-level margin for a bigger book!)
🚩 Red Flags
- Operating cash flow is negative (but understandable)
- No promoter infusion — PNB’s holding fell from 32.5% → 28.1% in 3 years
- Public stake down from 43% → 20% → mostly in institutional hands now
- Dividend payout still stingy
🧮 Act 6: Valuation Fair Value Range
Let’s do some simple back-of-the-envelope Edu math:
1. P/E Method (Conservative)
- FY25 PAT = ₹1,949 Cr
- Apply 14x P/E → ₹27,286 Cr
- Shares = 26 Cr
- FV = ₹1,050 (current price justified)
2. Bull Case (Assume P/E rerates to 18x)
- FV = 18 × 1,949 ÷ 26 ≈ ₹1,350/share
3. P/BV Method
- Book Value = ₹648
- P/B = 2x fair for clean housing finance books
- FV = ₹1,200–1,300/share
🎯 Fair Value Range: ₹1,050–₹1,350
📦 TL;DR for Busy D-Street Traders
- 📊 NPAs have crashed from 7.6% to 1.1% in 3 years
- 🏦 Profit zoomed to ₹1,949 Cr in FY25
- 📉 Still trades at just 14x earnings — sector median is ~20x
- 😐 No dividend excitement, but you’re here for growth not chai
✍️ Written by Prashant | 📅 22 June 2025
Tags: PNB Housing, Housing Finance, Indian NBFC, Home Loans, EduInvesting, Turnaround Stocks, FY25 Results, NPA Reduction, PSU Stocks, Value Picks
