Thank you very much. We will now begin the question -and-answer session. Our first question comes from the line of Devang Shah, an individual investor. Please go ahead.
PNBHOUSING · Quarter ended Sep 2025
PNB Housing Finance Limited analyst Q&A
The first question is, what is the update on the new CEO who is coming on the ground? Is it from the internal or you are going to get it from the external? Because I think so, last date is gone.
The company is taking all necessary steps for filling up the vacancy. So, as per the protocol, the disclosures will be first made to stock exchanges at an appropriate time and then definitely it will be released. So, in the interim, I am leading the team and accordingly reporting to the Board. So, that is how we are managing.
No, no. Sir, just want to know, it's already one-and-a-half months back, your CEO told like it's going on, from the internal or from the external, that's the simple question I am asking.
You will appreciate that given the sensitivity of the process involved, it will be difficult to comment on that at the current time.
Sir then what are we doing it from last one-and-a-half month? We know that one person is leaving the company, and that's for sure, you have accepted the resignation. Then what the company did in 90 days. It affected the stock price, and your market cap.
There is a detailed process which has been followed , and as I have mentioned that we have travelled the distance and the disclosures will first go to the stock exchanges, and then it will be released. And the company is mindful of the position, and they are working very fast on closing the gap.
Can I know what's the growth trajectory for the upcoming quarters, like is it on the loan side or the credit side ? It's on the retail portion as well as on the like big portion of the book, what's the growth trajectory?
See, we have guided for the year to grow at around 17 % to 18%, so that remains. This quarter and last quarter, we have grown between 17% to 18%, so that growth guidance remains intact.
Okay. That's fine.
Congratulations, sir, on the very strong quarter. Just a couple of things, one in terms of, as the previous participant asked, the new CEO, so can you just give an update in terms of the process that you had? So, you had, I think, how many applicants came in, how many were from the private sector broadly? So, in terms of the process that was followed and when it was closed, and by when we should expect? So, it should be next week, 10 days a month, a timeline for it. I am not asking the sensitivity of the candidature.
See, f irst of all, thank you for acknowledging the results. Thank you. And please appreciate that this is, again, given the sensitivity of the process. So, I would not be in position to share the details. This process was done by the Board directly, and they are following a transparent search for the right candidate. And definitely the results, as and when decided, as I mentioned earlier, will be disclosed to stock exchanges first, and will definitely reach to all of us.
Fair enough. So, what we understand is that the last date of the applications has gone say 2 to 3 weeks back and whenever the process is concluded, the exchanges will get to know first. That's the way it is.
Yes.
Okay sir. A nd many congratulations of standing up very tall . I n spite of so -called leadership crisis, you guys have done a phenomenal job. Thank you, sir.
Thank you very much. Thank you.
Thank you. The next question comes from the line of Renish from ICICI. Please go ahead.
Yes. Hi, sir. Congratulations on a good set of numbers. Just 2 things. So, one on the spread and margin trajectory side, obviously this quarter , the incremental cost of borrowing has gone down materially. Obviously, NIM contracted a bit because of the incremental rates being lower in Prime and Emerging. So, how do you see NIM sort of spanning out over the next 2 quarters? I mean, do you see the NIM have bottomed out in Q2 and then Q3, Q4 should see some improvement?
So, Renish, for this quarter if you see, we were able to maintain spreads. NIM has gone down due to some impact on the investment yield. And while we will continue to see some benefit coming in on the cost of borrowing , but at the same time, due to the mix being in favor towards Prime and Emerging. So, this will continue to have some impact going forward also. We have given a guidance of 3.6% to 3.7% as NIM guidance for this year. So, we expect it to remain range bound between this particular range for the second half of this year as well.
Okay. Got it. And the second question is on the affordable piece. So, obviously, I heard early on let's say, though there is an increasing 30 + and gross NPA, and it is far below the industry average, but can you throw some light on what has led to this spike in this quarter? Is there any particular geography, sort of product segment in terms of whether it is LAP, HL, what is driving this higher delinquency in this quarter?
Yes. Renish, you will appreciate that the portfolio is getting matured, and our portfolio more than 2 years itself is close to INR 2,500 crore plus. Now the portfolio is maturing, and we are in the Affordable business of handling EWS, LIG and we are getting into Tier-3 and Tier-4 markets. We are getting into informal segments , we are getting into high yield products. So, this spike is going to be there. I would appreciate if we do not see affordable on quarter-to-quarter basis, because every quarter is going to be different. And the first quarter in particular was cyclical also. We had some rain problem and there were problems in 1 or 2 states because of the government ordinance coming into place , so everything is getting improved. So, from there it will slightly hike up and after a particular mark, it will get stabilized.
Got it. And maybe just related with that, as you said, given now this book will get season next maybe 3-4 quarters. So, when you see delinquencies going up, are we also looking to, let's say, recover yields accordingly to sort of price that risk? How should one see the asset yield moving in affordable segment?
Yes, we do. So, the first one-and-a-half years of operation, we were more concentrating on Salaried segment and Formal segment. So, in the note I had read that the Self- employed is significantly growing up and even the Informal has gone up to 30% from 27%. So, these are high -yield products. So, when we are talking about increase in this delinquency, we are also mindful of increasing the yield as well.
And that should start showing in numbers from next quarter or it might take a few more quarters before it shows up in yield?
So, periodically, quarter by quarter, you will see this happening.
Okay. That's it. Thank you and best of luck.
Thanks Renish.
Thank you. Our next question comes from the line of Prithviraj Patil from Investec. Please go ahead.
1+ is around 2.5%.
Okay. And a follow up that is, so we have shown that 30 + DPD and 90 + DPD below industry. So, 1+ DPD also I am assuming is below industry levels, right?
Yes.
Okay. And the second question is, what is the asset pool that is pending for recovery? Like I have seen that there is write -back from corporate as well as the retail pool. So, I just wanted to know how do we see credit costs going forward? What could be the write- off? What is the pool that's pending
See the write-off pool, which is available, as I mentioned in the opening remarks, is close to INR 1000 crores, out of which, INR 675 crores is from Corporate and the balance is Retail. So, recover y has been steady so far, quarter -on-quarter from this pool. And we envisage this happening for some more quarters for now. So, credit cost will definitely be the range bound, the way it is as of now.
And the third, the last question is on the cost of borrowing. So, I saw that the incremental cost of borrowing has also come down to 7.4%. So, largely the whole of 66% of our book has been repriced, right?
Right. And this is stable on incremental cost. We were at 7.44 last quarter. This quarter we are at 7.42. This will keep adding up on the overall cost of borrowing as well from the benefits standpoint, and we might have to look at passing on also some of the benefits.
Okay. Thank you.
Thank you. Our next question comes from the line of Harshit Toshniwal from Premji Invest. Please go ahead.
Hi, sir. Firstly, congratulations for managing the transition so well. I think the question was more regarding the disbursement growth, sir. So, clearly, wanted to understand that if I look at the affordable segment, even though our disbursement growth y-o-y looks north of 20%, but at the same time we have also expanded the branch count from 160 to 200. So, basically, disbursement for branch, despite branch increasing, hasn't happened a lot this quarter. So, if you can just explain, is it because in the transition phase, we want to go slow, and we should expect the disbursement growth in general to be a bit more moderate in the next few quarters, till the Management is fully transitioned, or you think that it's a reason of the maturity itself, and then it's natural to expect a low disbursement growth because of the market's condition?
Yes. Your second point is right. It is more to attribute with the monsoons continuing, where in Affordable, we depend more on self -construction and plot-plus construction cases, where in the Retail cases, the construction stage did not come because of the monsoons. And you will appreciate that the first 2 quarters are slightly muted in terms of growth in Affordable. Now that the festival season has come in, now from here on, the numbers will start to come in.
Going ahead. So, I think even on disbursement per branch, ma'am, on a y-o-y basis, the number didn't grow. So, was more asking that since our branches are seasoned, shouldn't the disbursement per branch should have shown a better result in Affordable?
Correct. I will explain it. Because the 40 new branches which have just now started to perform. They have not even reached their normal level. Optimum is very far off. So, when we take all the overall 198 into consideration, then the total overall business seems to be flat. That is the reason. Once these 40 branches also start performing to a normal level, then you will find the per-branch productivity slightly higher.
Okay. That was one. And the second one was on the Corporate segment, ma'am, that I think we had some aspiration to restart the Corporate segment. But at present, how should we look at that business? So, I think if I am not wrong, we were wanting to do INR 500- INR 600 crore disbursal a year in '26, if it goes over there. But at least as of now, how should we look at that segment? What are our plans for re-entry? Have we halted that for now? And if at all, what could be the aspirational disbursement with which we want to restart the Corporate?
Yes. Harshit, we have revamped the corporate credit policies and there have been a couple of sanctions which should translate to disbursement in Q3 and Q4. So, Corporate is on the cards, as already talked about. So, you will see some business happening on the Corporate side. But it is gradual and slow, it depends upon, you will appreciate each case has their own nuances. So, this business is being done in a very thoughtful manner. The disbursements will pick up.
Okay. And if I remember correctly, we will be focusing more on the INR 50 crore - INR 60 crore ticket size, granular portfolio itself. So, even if, for example, 2 -3 cases, when you say it would be more around INR 100 crore to INR 150 crore disbursement at max, nothing lumpier.
If you can help, sir, you said that we have changed the corporate policy. Which is the segment then are we now planning to target or when we say the change in corporate policy, what are the guardrails in this segment which we want to adhere to while starting the segment?
See, when I said change in corporate policy, I meant the revamp in corporate policy , because the earlier one was, in fact, pretty old when we used to do Corporate business at a full-fledged manner. So, the guardrails largely remain the same, focusing on right segment, right choice of the builders and the project. So, the guardrails broadly are the same, but the policy is revamped, given the current nuances.
And the ticket sizes would be, let's say, up to INR 150 crores to INR 200 crores.
Okay. Okay. Sure, sir. Okay, sir. Perfect. Thank you. Thanks a lot.
Thank you, Harshit.
Thank you. Our next question comes from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.
Hi, good evening, everyone. Thank you so much. Sir, there's just 2 questions really. First things first, we have taken a PLR cut of 10 basis points until now, while if I look at some of our larger peers, LIC Housing, Bajaj, even a smaller player like Can Fin Homes, they have taken a higher PLR cut than what we have taken. While I appreciate the fact that we have been able to maintain very healthy yields and margins, are we not seeing higher BT outs, particularly in the Prime segment now? And I remember Vinay sir saying that maybe at some point in time, we will look to pass on through some PLR cuts, maybe in the subsequent quarters. So, how are we thinking about that, if you could just explain that? And are there more benefits expected in the cost of borrowings? Why I asked this is I remember sir making that comment that even in the second half, margins will remain between 3.6 % to 3.7 %. So, are there more benefits which will be expected? Because from what I understand, yields will remain und er pressure if we were to pass on more PLR cuts in the coming quarters.
That's right, Abhijit. So, if you see from Q4 till now, Q2, our cost of borrowing has gone down from 7.84 % to around 7.7 %. So, we have seen overall, if you see a benefit of somewhere around 14 to 15 basis points, out of which 10 bps we have passed on. So, we are monitoring it very closely. And once we see sizable benefit coming in, we intend to pass it on to the customers. We would be watching the next monetary policy as well. And then accordingly time it and see if we can align it with that change.
Got it, sir. And then, sir, in the opening remarks, we spoke about this corporate account, which has led to some initial release. So just two subparts, more of a data keeping question. One is, how much exactly was the ECL release on this account? And also, if you can, basically, qualitatively speak a little bit about this corporate account, which corporate account , without naming it, of course , some details about this corporate account, how much was the total exposure?
This was a standard account and they wanted to close the loan and so they did so. So, the ECL release was close to around Rs. 70 crores from the account. It was a standard performing account.
Understood. So basically, Stage-I account and the ECL release was about Rs. 70 crores. What was the total outstanding in this account?
Yes, it was a Stage-I account.
Yes, around Rs. 330 crores.
Got it, sir. And lastly, for Valli ma’am, this thing has been asked by a previous participant. But I am just trying to kind of understand, while we are cognizant of the fact that we are moving towards more self -employed, more informal segment, which you shared is 30% now. Don't you think the risk quotient at least is going up, right and maybe going forward, right, if the yields increase is not commensurate with the risk increase, then probably, we might have problems later , if you could just share some thoughts on this dynamic of risk reward in the Affordable segment, given the fact that we are leaning more towards informal, more self-employed?
Yes. See, now that PMAY2 has come, there is a clear guideline of what are all the profiles we have to look in and they have even mentioned the type of customers that we have to service in. This time, the circular is very explicit. So , when we are wanting to promote PMAY2, the government initiative, then we have to get into EWS and LIG. When we get into EWS and LIG, we have to enter into this self -employed and informal segment. While we are talking about that, we internally have kept in mind that we will not cross self-employed at any point of time, more than 45 %-50%, which we have kept for ourselves. And same informal, we have kept in mind that we will not cross more than 35%-40% at any point of time. And you have to appreciate that sti ll in our portfolio, close to 50 %-53% is formal vanilla salary accounts. So , we are even servicing those customers. So. we are balancing it out because we will have to bring in yield as well. Now, with the cost coming in, we will have to manage that as well. So , to promote PMAY, this is one measure we will have to take, but we are very mindful and we are going ahead with that.
Got it, ma'am. Thank you for patiently answering all my questions and I wish the PNB Housing team the best.
Thank you, Abhijit.
Thank you. Our next question comes from the line of Sravan from Sincere Syndication. Please go ahead.
Yes, sir. My question was rather focused on the next CEO, but as you have already given an answer, my follow-up question would be on credit growth. What is the credit growth this quarter, Q2?
You meant loan growth?
Yes, loan growth.
Loan growth is 17%, 16.9% for the year-on-year.
For the year-on-year. And have you got any update, possible update on the CEO? Because this has been going on for a while and the stock price really took a dive. So, we would appreciate an effort and an announcement maybe. Are you, any timeline that you can give in? Any information without leaking any sensitive material? I understand that and I can appreciate that. But any information on how long would it take or where are you in the process right now? Have you streamlined any of your candidates? Something like that would be helpful.
See, Sravan, I have already answered that, but however, given the question from investors, let me say that leadership transitions are never easy, especially after a phase of success and momentum. But ye s, what has stood out is share resilience and responsibility of PNB Housing leadership team that the business remains steadfast and we have delivered on all the parameters as expected. So, we continue to remain the same and grow quarter by quarter and the strategy remains the same. It is all about execution as already talked about in various calls with the investors. And while we appreciate the sensitivity of the process, meanwhile, patiently waiting for the new MD and CEO to take charge, the company remains responsible and accountable t o grow the b usiness in line with the expectation of the stakeholders.
And could you just answer , this would be my last question. Will the new CEO being appointed, will he follow the same strategy of you focusing on the higher yield segment, upping or doubling your affordable loan book? Would he stick with the strategies or would there be any changes, any shocks?
We have already spoken about it, we will appreciate that the mortgage business is largely monoline what we do. And till March ‘27, we have already laid out a strategy and working towards the same. So most likely , the strategy should remain the same plus minus little variation.
Thank you.
Thank you. The next question comes from the line of Kunal Shah from Citigroup. Please go ahead.
Yes. Thanks for taking the question. So firstly, maybe particularly with respect to the lower provisioning on when we look at it overall on, when I look at like cumulative provisioning, so one is obviously, I would tend to believe that the entire moment in gross Stage-I, the entire coverage is purely on account of the release of the provisioning. I think you mentioned like Rs. 70 odd crores kind of a number. Otherwise, the coverage has been broadly sustained in the Stage-I assets?
Yes. That is right, Kunal.
And secondly, on the consolidation part, on the branches side, so we have seen maybe 2 branches being lower, say in the Affordable Housing segment, obviously on the Emerging side, it is still growing. But again, on the Prime side, it has been lower by maybe 3 odd branches or so. So maybe do we expect to see this consolidation out there? What would be the branch expansion plans here on? And if you can give the number of employees breakup across these 3 businesses?
Yes, I would say that two branches here and there does not affect, it is part of BAU and it is more to do on increasing the operational efficiencies of the company. And so that is where it is and it does not change the business plan per se. And on employee numbers, I don't have the numbers handy as of now. But however, having said that out of 356 branches, the major number of branches are in Affordable and Emerging segments which resonate with the company strategy to grow these businesses faster and Prime continue to be a range bound growth given the economic, it has to make some economic sense for the company to accelerate that business. So accordingly, we are overall maintaining the retail asset growth.
But there has been any exiting with respect to the locations or not really, maybe it is like just maybe the branches within a particular locations, they have just got consolidated?
Yes, Kunal, see what we have done is it is as a process standard operating process, wherever we found that the branch is not profitable, we consolidated it. But well, as per the guidance we have given already, we are in the process of opening more branches in this particular quarter. By the end of this year, we are talking about having 250 branches in Affordable housing so that remains. So this consolidation has happened as a part of our standard operation process and it is BAU.
And this would be the net number. So, at the gross level, how much would have been the addition and the closure?
No, this is the gross only. The additions will come subsequently. We are working on it.
Got it. Thanks.
Thank you. Our next question is from the line of Sanket Chheda, an Individual Investor. Please go ahead.
Yes, so just wanted to ask on the account that you mentioned was a Stage-I account. But then why the provision cover on the same was 20% to reverse the Rs. 70 crore amount that you just elaborated?
That was basically because of the past trend that happened during COVID crisis. So, the provisioning has been kept at a slightly higher level. However, it was a standard account has been paying regularly. It is more to do with the client that they had funds and they want to foreclose.
Sure, sir.
Thank you. The next question comes from the line of Siraj Khan from Ascendancy Capital. Please go ahead.
Yes. Thank you for the opportunity and good set of numbers. So, sir, first to clarify, the exit NIM for FY '26 that was mentioned was 3.6-3.7. Was that correct? Did I catch that right?
Yes, that is right.
And also another classification, our guidance that we had given for FY '27 that 15% of the portfolio, so approximately Rs. 15,000 crores will be the AUM for Affordable and 65% will be Prime and the balance will be Emerging. Is that still holding true or will that change?
Yes. We are working on that strategy.
Sanction to disbursement ratio is around 70%.
Sanction to disbursement ratio what?
Around 68%-70%. So, you can calculate.
The sanction amount if that could be shared?
I don't have it handy, Siraj, but I think it should be upwards of Rs. 8,000 crores.
Next question was, what is the BT in and BT out rate, specifically for the Affordable segment, if you could share and the overall also?
So, for Affordable, it is around, BT in is around 9% and BT out is around 4%.
And final one. So , I think, Valli ma’am had said that with the branches that we have opened over the last few quarters, 40 new branches, they are still a bit away from their optimal level. So, what is the optimal level of business, like with respect to amount, like how much amount of disbursements or the number of files that we consider that the branch is now optimal and it should run on its own two feet and should start to be more productive? What is that level?
Yes. We will appreciate that we have different types of branches. We don't have uniform type of branches. We have large branch, medium branch and small branch, which we call it as Ganga, Yamuna, Kaveri. So, if a Ganga branch reaches close to 1.8 Cr, Yamuna reaches close to 1.3 Cr and the Kaveri starts doing close to 70-80 lakhs, which is basically in the Tier-4 and Tier-5, then we feel it has reached its optimum level and from there, the takeoff happens.
So, this is per month disbursement that you said, 1.8, 1.3 and 70-80 lakhs?
Yes. This is the different branches disbursement per month.
Understood. And finally, on the asset quality, yes, our asset quality is still much below than our peers and everyone in the industry. But where do you see it settling, say, by the FY '27 target that we have placed? Where do you see it in that range? Because some of our peers are showing some signs of, in Q1, they said there was a little bit of asset quality issue, although seasonal, but there is a little bit of a thing with respect to the ordinance in the MFI space and the lower ticket size not having the best of the bounce rates, all that stuff. So, could you give some color with respect to where do you see the asset quality 2 years on, one and a half years on, and a bit of a commentary on the asset quality?
See, Siraj, this will be range-bound and I think this should remain around 1% itself. And we have been working very hard on asset quality over the last couple of quarters and we tend to maintain the guardrails. So, it should be range-bound around 1%.
The GNPA?
Yes.
Understood. And any commentary with respect to any product , category of customer , regions that you are seeing, say, early signs of warnings or anything of that sort?
Not really.
Not really. It is like portfolio seasoning which is happening across.
Understood. And finally, on the asset pool, the Rs. 1,000 crores of asset pool that is pending, so I believe another 4 -6 quarters would still continue to be on this negative credit cost trajectory. Is that understanding because then that is directly helping our ROA and the profitability for the business as a whole. So, the negative credit cost episode will continue, say, maybe another 4-5, 6 quarters or can we see lumpy recoveries in the coming few quarters and this gets extinguished maybe before the FY '27 closes?
We have line of sight for next 2-3 quarters. That should happen. And then again, thereafter, it depends on timing of certain corporate accounts, etc.
Great. That was helpful. Thank you very much.
Thank you. Our next question comes from the line of Chinmay Nema from Prescient Capital. Please go ahead.
Good evening. Sir, my question is on the Affordable side. I just wanted to understand, typically, what is the month on book after which you consider an account seasoned or when you see delinquency start flowing in?
It is between 12-24 months, somewhere around.
This is a line with industry mortgage loan cycle. So , I think generally an account holds some maturity around 18 months to 24 months and that is when you see early signs of delinquency.
Yes. The maturity of the portfolio is attributing to the spike of this and as we told, please appreciate the factor in Affordable housing, we cannot see quarter-on-quarter. Every quarter there will be slight increase and the first quarter , there was some cyclical issues also. The monsoon, certain ordinance, pathways, state governments and all also came and hit us. But generally, it is a right statement to say that the portfolio maturity attributed to the spike.
Got it. So ma'am, just lastly, in a steady state, what would be the 30+ and the 0+ numbers that you expect from this portfolio? I know you called out the 90+ number at 1%?
See, it will be as per the industry number. We don't have a number as such for that. We are only focusing on to keep the NPA less than 1% at the way. We would not actually have a number. You can take the industry guideline for that.
Thank you.
Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to Mr. Chaitanya Yadav for closing comments. Over to you, sir.
Thank you, everyone for joining us on the call. If you have any questions unanswered, please feel free to get in touch with Investor Relations. The transcript of this call will be uploaded on our website that is www.pnbhousing.com. Thank you all for your participation.
Thank you. On behalf of PNB Housing Finance Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.