Shares of PNB Housing Finance experienced a significant rise, jumping over 10% on Friday after the business disclosed its financial performance for the second quarter of the fiscal year. This surge highlights the increasing interest in share market investment, particularly in the housing finance sector.
Stock performance overview
In early trading on the National Stock Exchange, PNB Housing Finance’s stock climbed by as much as 10.7%, reaching ₹1,034.95 per share. By 9:34 am, the stock was up by 5.2%, trading at ₹983. On the Bombay Stock Exchange, the shares rose by 5.4%, reaching ₹983.9 each.
Strong financial results boost investor confidence
The September quarter financial report revealed a net profit of ₹469.68 crore, a remarkable 22.6% increase compared to ₹383 crore in the same quarter last year. This impressive growth reinforces the attractiveness of share market investment in PNB Housing Finance.
The company's revenue from operations also showed positive growth, increasing by 4.5% to ₹1,780.31 crore, up from ₹1,703.86 crore during the previous year’s quarter. These results indicate a strong performance in the housing finance sector.
Improved asset quality and retail disbursement
PNB Housing Finance has also made notable progress in asset quality. The gross non-performing assets (GNPA) ratio improved to 1.24%, down from 1.78% in the same period last fiscal year. The GNPA ratio was 1.35% in the first quarter of FY25, showing continuous improvement.
Moreover, net interest income rose by 1.2% year-on-year to ₹669 crore. However, the net interest margin (NIM) fell slightly to 3.68%, down from 3.96% in Q2 FY24.
Retail disbursement saw a significant surge, expanding by 28% year-on-year to ₹5,341 crore. The affordable and emerging markets contributed 31% to this total. As of September 30, 2024, the retail loan assets stood at ₹67,970 crore, with these segments accounting for 23% of the total retail loan assets.
Borrowing costs and growth strategy
The cost of borrowing decreased to 7.84% in the latest quarter, compared to 7.92% in Q1 FY25 and 7.99% in Q2 FY24. Additionally, deposits grew by 5% year-on-year, amounting to ₹17,659 crore as of September 30, 2024.
PNB Housing Finance currently operates 303 branches, 160 of which are focused on affordable housing and 50 on emerging markets. This expansion strategy underlines the company's commitment to enhancing its presence in the housing finance sector.
Key takeaways
The positive trends indicate that share market investment in PNB Housing Finance remains a promising opportunity for investors.
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