PNB Housing Finance is projecting robust growth in its retail book, targeting a Rs 1 lakh crore milestone by 2026-27 (Apr-Mar), up from Rs 77,732 crore in the quarter ended June, Girish Kousgi MD and CEO said. He added that the company expects 18% retail growth in FY26 and plans to disburse Rs 22,000–23,000 crore across segments this year.
On Monday, the company reported profit after tax for Apr-Jun at Rs 534 crore, an increase of 23% on year. However, on a sequential basis, it declined by 3%. Net Interest Income grew by 17% on year to Rs 760 crore.
Affordable segment core to expansion strategy
The affordable housing segment, which witnessed muted Q1 disbursements due to seasonal factors, remains central to PNB Housing’s expansion strategy. “Affordable book grew 143% YoY. We aim to take it to Rs 9,500 crore by December and Rs 15,000 crore by FY27,” Kousgi said. In the reporting quarter, the loans assets in the affordable segment are at Rs 5,744 crore.
The share of affordable and emerging markets in retail disbursements rose to 50% in Q1 from 40% the previous quarter. “We’re targeting 60% on incremental disbursements this year,” he added. The company has reclassified 20 prime branches into emerging market branches and plans further realignment or closures to support the strategy.
Margins, borrowing mix, and capital outlook
Despite yield moderation and the impact of rate transmission, PNB Housing has raised its net interest margin guidance to 3.7% for FY26 from the earlier guidance of 3.60-3.65%. “We passed on 10 basis points to customers, having gained 8 bps from rate cuts. Transmission benefits will continue in Q2,” Kousgi noted.
Cost of borrowing is expected to decline in Q2 as well, supported by a favourable funding mix. In Q1, the cost of borrowing fell to 7.76% from 7.84% a quarter ago. The company has shifted towards deposits, NHB refinance, and NCDs, reducing bank loans to 35% from 39.4% a year ago and, lifting NHB exposure to 15% from 9.1%. He also said that they will maintain the current borrowing mix going ahead.
On asset quality, PNB Housing recovered Rs 57 crore from written-off pools in Q1 and is targeting over Rs 300 crore in recoveries for the year. “This will come from both retail and corporate exposures,” Kousgi said.
There are no plans to raise fresh equity capital in FY26, but the company will continue its routine debt-based fundraising via term loans, NCDs, and ECBs. The capital adequacy ratio of the housing financier stood at 29.68% as on June 30, with tier-1 capital at 28.96% and tier-II capital ratio at 0.72%.
Kousgi emphasised that co-lending is not a strategic focus currently, as the company is committed to self-sourcing its book. On the tech front, most spending is complete, with artificial intelligence deployment underway in areas like customer interaction, but it is very premature, he added.