Motilal Oswal has issued a buy call on PNB Housing Finance (PNB Hsg Fin), setting a target price of ₹1,160 per share. The brokerage highlights the company’s strategic shift in its product mix, which is well-tracked in execution and is expected to drive significant growth in the coming years.
Key Highlights:
- Strategic Product Mix Shift: The company’s improved product mix is anticipated to aid Net Interest Margin (NIM) expansion while maintaining low credit costs through steady recoveries.
- Loan Growth Outlook: PNB Housing Finance is now positioned to deliver an 18% loan CAGR over FY24-27, driven by its diversified offerings and enhanced operational efficiency.
- Profit Growth Expectations: The company is expected to achieve a profit CAGR of 23% over the FY24-27 period, reflecting robust profitability metrics.
- Improved Returns: PNB Hsg Fin is forecasted to deliver Return on Assets (RoA) of 2.6% and Return on Equity (RoE) of 14% by FY27, underlining its strong financial performance trajectory.
- Valuation: The stock currently trades at 1.2x its FY26 book value, indicating an attractive valuation given the anticipated growth potential.
Motilal Oswal’s bullish stance on PNB Housing Finance is anchored on the company’s well-executed strategic initiatives and strong growth prospects in both profitability and asset quality.
Disclaimer: This article is for informational purposes only. Please consult a certified financial advisor before making any investment decisions.