Q2PAT rose 33.2% y-o-y to Rs 2.53bn, 8% miss vs. our estimate due to higher credit cost and tax. Loan disbursal moderated in Q2. ALM gap exists but CP mix fell in Q2. We expect ALM mismatch (<1 yr), higher CP mix to affect loan growth and spreads. EPS growth should decelerate and RoA may be capped. Asset quality is stable, but exposure to stressed developer segment is a risk. Stake sale overhang persist, but at 1.7x FY20E BV, we see limited downside. \u2018Hold\u2019. Loan growth still strong; but disbursal decelerates: AUM grew 43% y-o-y. Disbursal growth slowed to 14% y-o-y (Q125% y-o-y) due to (a) slowdown in home loan (HL) disbursal as PNBHFL likely lost share due to steep hike in HL rates and (b) deliberate slowdown in LRD disbursal, due to tighter liquidity. PNBHFL continues to add branches (+12 in H1 FY19), but we believe PNBHFL's disbursal growth will moderate due to tighter liquidity. We forecast AUM growth of 31% CAGR over FY18-21E (50% CAGR over FY16-20). Spread +2bps q-o-q, but should moderate: Spread (ex assignment) was 213bps (-13bps y-o-y). Reported yield (adj. for assignment) rose 10bps q-o-q to 9.94%, reflecting partial impact of lending rate hikes. Average borrowing cost rose 8 bps q-o-q to 7.81% (+5bps y-o-y). Marginal funding cost in Q2 was ~8.2-8.3%. This should rise in coming quarters due to rising bond yields and re-pricing of CPs. PNBHFL had raised HL by 15bps in October. It had earlier raised rates for entire book by 25bps (Q1) and on new loans by 40 bps. Management expects to maintain spreads of 205-215 bps, but we expect 22 bps spread compression over FY18-20E. Opex costs surprise negatively: Cost to income rose 97bps q-o-q to 24.5% in Q2 due to (a) ESOP related costs (`90 mn impact) and (b) upfront accounting of employee costs related to its newly-incorporated inhouse sales channel subs. PHFL as per Ind AS (Rs 190mn impact) \u2013 this was earlier off rolls and was amortised as loan acquisition cost. ALM mismatch exist, CP mix decline a positive: PNBHFL has ALM gap of `5.3 bn in 1-3 month bucket and cumulative ALM gap of Rs 9bn in less than 12 month bucket. We do not see major liquidity issues near term as it has over `40bn of cash\/ liquid investments as on Sept 18.