• Retail loan book grew 16% YoY to INR 86,946 crores as of March 31, 2026, with total loan book at INR 87,347 crores
• Q4 disbursements grew 36% YoY and 50% QoQ to INR 9,355 crores, marking one of the best quarters
• Affordable and Emerging Markets segment share increased to 40% (from 37% previous year) with target to reach 50% in two years
• GNPA improved significantly to 0.93% (below 1% milestone) from higher levels, driven by strengthened collection infrastructure
• Recoveries of INR 332 crores for full year FY26 resulted in negative credit cost of 45 bps (Q4: 78 bps negative)
• Re-entered corporate lending with INR 335 crore disbursement in Q4, loan book at INR 401 crores, targeting 3% of total book in FY27
• Facilitated 5,000 subsidies under PMAY scheme, supporting affordable housing mission
• Launched Infinity application for fully digitized, paperless workflow; digital channels now generate 15% of overall leads
• Expanded network by 35 branches in Q4 to 393 total branches (229 in affordable, 137 in emerging markets)
• Board recommended dividend of INR 8 per equity share (face value INR 10)

PNB Housing Finance delivered a strong Q4 FY26 with 36% YoY disbursement growth and improved asset quality (GNPA at 0.93%, below 1%). Management is confident about FY27 with guided retail loan book growth of 18-20%, targeting INR 1 lakh crore+ overall book, driven by 50% growth in affordable segment and re-entry into corporate lending, though yield pressures and geopolitical uncertainties remain monitored risks.

For FY26, profit after tax increased 18% YoY to INR 2,291 crores, delivering ROA of 2.66% (up from 2.55% in FY25) and ROE of 12.73%. Q4 PAT was INR 656 crores, up 19% YoY and 26% sequentially. Net interest income grew 11% in Q4 and 13% for the full year. NIM improved 6 bps QoQ to 3.69% in Q4. Yields moderated 25 bps to 9.47% in Q4 due to lower incremental yields and higher runoff, but management believes yields have bottomed out. Cost of borrowing improved 15 bps sequentially to 7.35% (full year: 7.57%, down 29 bps YoY), with incremental cost at 7.23%. Spread compressed 10 bps QoQ to 2.12% (full year: 2.2%). Operating expenses grew 13% YoY to INR 920 crores, driven by branch additions and new labor code implementation. OpEx to AUM ratio was 1.08% for Q4 and 1.05% for full year, expected to remain 1-1.1%. Capital adequacy ratio stood strong at 27.26% with Tier 1 at 26.89%. Net worth reached INR 19,219 crores with book value of INR 738 per share.

Management displayed confident and forward-looking tone, emphasizing multiple strategic priorities. MD & CEO Ajay Kumar Chukla highlighted that yields have bottomed out and should improve from Q1 FY27, driven by higher mix of affordable, emerging, and corporate business. The team emphasized their digital transformation journey with the Infinity app and AI-enabled solutions across the loan lifecycle as key efficiency drivers. Management is strategically focused on 'growth with quality,' aiming to further improve GNPA from current 0.93% while targeting 18-20% retail loan growth. They emphasized enhanced distributor engagement as a key success factor behind Q4's strong disbursement growth. CFO Vinay Gupta expressed confidence in maintaining current yield trajectory with 5-10 bps upside while acknowledging some cost of funds headwinds due to current liquidity conditions. The reentry into corporate lending is positioned as calibrated and selective, focusing only on reputable builders in top 7-8 tier-1 cities (Mumbai, Pune, Bangalore, Chennai, Hyderabad, Delhi) at 11.5-12% yields, with corporate book capped at 3% in FY27. Management acknowledged potential moderate and transient impact from geopolitical conflicts but emphasized structural resilience of housing demand.

Several headwinds were acknowledged during the call. Yield compression remains a concern with affordable housing yields dropping 75 bps QoQ to 11.35% due to intense market competition and repo rate cuts totaling 1.25% over the year, though management claims this has bottomed out. Geopolitical conflicts (crude oil prices) may keep inflation and interest rates elevated and could marginally impact asset quality, though management expects moderate and transient effects. Current liquidity conditions present headwinds on cost of borrowing front, with limited further benefits expected from the rate cut cycle. The spread compressed 10 bps QoQ from 2.22% to 2.12% due to pricing pressure in prime business. Operating expenses grew 13% YoY with addition of 35 branches in Q4, whose full cost impact will be visible in FY27, though management expects operating leverage to partially offset this. Balance transfer out rates stood at 8.62% in Q4 (vs 8.9% in Q3), indicating ongoing competitive pressures. The company is still below optimal housing loan mix from a priority sector perspective, currently at 65% retained home loans with room to reduce. Affordable disbursements were weak in FY26 (down 93% per one analyst's calculation in certain segments), attributed to mid-year market challenges that were later corrected.

Revenue Outlook: Retail loan book projected to grow 18-20% in FY27; overall loan book to exceed INR 1 lakh crore mark

Margin Outlook: NIM guided at 3.5-3.65% range for FY27; yields expected to improve from Q1 FY27 after bottoming out

Key Targets:

• Retail loan book growth: 18-20%
• Overall loan book: Above INR 1 lakh crore
• NIM: 3.5-3.65%
• ROA: 2.4-2.5%
• Credit cost: Expected to continue declining, remain negative at 15-20 bps due to recoveries
• OpEx to AUM: 1-1.1%
• Corporate loan book: 3% of total book in FY27, 5-6% in year 2, 8-9% in year 3
• Affordable + Emerging mix: Target 50% in two years (currently 40%)
• Expected recoveries FY27: INR 200-250 crores

The Q&A session revealed analysts were primarily focused on three areas: (1) sustainability of margin improvement given ongoing yield pressures and competitive intensity, (2) growth trajectory and mix shift toward affordable/emerging segments versus prime, and (3) asset quality trends and recovery outlook. Multiple analysts probed on what gives management confidence that yields have bottomed out, with concerns about 75 bps QoQ decline in affordable yields. Management consistently emphasized that distributor engagement, digital transformation, and business mix shift (targeting 50% affordable+emerging from current 40%) are key drivers. They were confident about yield stabilization citing reduced repo rate volatility and improving BT-out trends. On asset quality, management was notably positive, highlighting the sub-1% GNPA milestone and negative credit cost guidance for FY27. Some concerns were raised about weak affordable disbursements during the year and increase in prime 30+ delinquencies, which management attributed to temporary factors now resolved. The corporate lending restart drew questions on strategy and risk, with management emphasizing a calibrated approach capped at 3% of book in FY27. Overall, management responded confidently to concerns, providing detailed metrics and guidance, though acknowledged headwinds from geopolitical uncertainty and liquidity conditions on cost of funds. The tone was balanced - acknowledging near-term challenges while expressing confidence in medium-term structural growth drivers and strategic positioning.