Shares of PNB Housing Finance fell on Thursday, October 29, despite the company reporting an 11% sequential increase in net profit to ₹617 crore for Q2FY27. Profit after tax (PAT) rose 6% year-on-year from ₹582 crore, while net interest income (NII) increased 15% to ₹878 crore from ₹765 crore in the corresponding quarter last year.
Pre-provision operating profit (PPOP) grew 16% year-on-year to ₹749 crore from ₹646 crore. Assets under management (AUM) rose 17.1% to ₹98,210 crore, compared with ₹83,879 crore a year ago, while disbursements increased 60.3% to ₹9,609 crore from ₹5,995 crore.
Loan book expands, disbursements rise
PNB Housing Finance’s loan book grew 19.2% year-on-year to ₹95,079 crore in Q2FY27 from ₹79,771 crore. The retail loan book increased 18.8% to ₹94,391 crore.
The affordable housing loan book rose 44.5% year-on-year to ₹9,438 crore, while the emerging markets loan book grew 22.2% to ₹29,318 crore. The prime loan book increased 11.7% to ₹54,635 crore.
Disbursements rose 59.4% sequentially from ₹6,029 crore in Q1FY27. The company’s Q2 disbursement figure includes ₹838 crore from pool buyouts, compared with ₹147 crore in the previous quarter.
Margins and profitability
Net interest margin (NIM) stood at 3.67% in Q2FY27, unchanged from the year-ago quarter but higher than 3.50% in Q1FY27. The spread improved to 2.43% from 2.26% a year earlier and 2.12% in the previous quarter.
The yield on loans declined to 9.74% from 9.95% a year ago, while the cost of borrowing fell to 7.31% from 7.69%.
Return on assets (ROA) stood at 2.53%, down from 2.73% in Q2FY26, while return on equity (ROE) declined to 12.33% from 13.14%.
Asset quality improves
Asset quality indicators improved year-on-year. Gross non-performing assets (GNPA) declined to 0.91% of the loan book from 1.04% a year ago, while net non-performing assets (NNPA) fell to 0.55% from 0.69%.
Stage 2 assets, which indicate loans showing signs of increased credit risk, declined to 1.72% from 2.21% a year earlier. Collection efficiency stood at 99.3%, compared with 99.9% in Q2FY26.
However, gross non-performing assets in absolute terms increased 4% year-on-year to ₹863 crore from ₹830 crore. The capital adequacy ratio stood at 27.03%, compared with 29.80% a year ago.
Shares of PNB Housing Finance were trading 0.3% down at ₹1,119 on Thursday following the September quarter results. The stock has declined more than 13% so far in 2026 and 19% over the last 12 months.
PNB Housing Finance shares fall despite 11% sequential profit growth; asset quality improves