PNBHOUSING Q2 FY27 Earnings Call: Disbursements Jump 60% To Record High, AAA Rating From All Four Agencies

PNBHOUSING held its Q2 FY27 earnings call on October 28, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Profit Growth Outpaces NII; One-offs Flatter Headline Metrics

• PAT of Rs.617 crore, +66% YoY — NII grew 15% YoY and gross margin 16% YoY; PPOP up 16% YoY to Rs.749 crore in Q2 FY 2026-2027.
• NIM of 3.67% and spread of 2.43% — but adjusted for a one-off (prepayment charges recovered on one legacy corporate account, now fully closed), yield/spread/NIM stood at 9.56% / 2.24% / 3.49%.
• Portfolio yield rose 26 bps QoQ to 9.74% — cost of borrowing fell 5 bps QoQ to 7.31% (incremental 7.26%, down 15 bps), aided by July liquidity, NHB borrowings and fixed-rate IRS deals.
• ROA of 2.53% in Q2 and 2.44% in H1 FY 2026-2027 — ROE at 12.33%; CFO Vinay attributed the elevated Q2 ROA to a one-off in overall interest income.
• Opex rose 20% YoY to Rs.260 crore — driven primarily by manpower additions in the affordable vertical; opex/ATA contained at 1.03%. Includes a one-off ~Rs.7 crore GST payment on prior-year royalty to PNB (tax component only, reimbursed).
• CAR at 27.03%, Tier 1 at 26.62% — net worth Rs.20,250 crore; book value per share Rs.776 as of Q2 FY 2026-2027.

Disbursements at Record Highs; Affordable & Emerging at 41% of Retail Book

• Disbursements +60% YoY to Rs.9,609 crore — including Rs.838 crore pool buyout; retail disbursements at an all-time high of Rs.9,250 crore (+54% YoY) in Q2 FY 2026-2027.
• Segment disbursements (Q2 FY 2026-2027) — affordable Rs.1,149 crore (+40% YoY), emerging markets Rs.2,882 crore (+36% YoY), prime Rs.4,380 crore (+44% YoY), corporate Rs.360 crore (vs Rs.215 crore in Q1 FY 2026-2027).
• Loan book of Rs.95,079 crore, +19% YoY — retail portfolio Rs.94,391 crore (+19% YoY); affordable and emerging books grew 45% and 22% YoY, together 41% of the retail book; management on track to lift this to 45% by end of FY 2026-2027.
• Non-housing share rose to ~35% of the outstanding book — from 33% in Q1 FY 2026-2027; ~48% of Q2 disbursements were non-housing, and 42-43% of prime disbursements were non-housing. Management attributed part of the affordable non-housing/LAP share (~35%) to a regulatory classification change for self-construction cases above 60% construction stage, not a true mix shift.
• Strategic initiatives — Rs.107 crore under emerging developer finance in H1 FY 2026-2027; Rs.241 crore affordable disbursals from selected prime/emerging branches; micro housing launched in Q2 FY 2026-2027 with Rs.71 crore disbursed; Rs.986 crore of pool buyouts in H1 against a budgeted ~Rs.2,000 crore for FY 2026-2027.
• PMAY outreach — PMAY Yatra campaigns across six states; India's first PMAY nodal branches inaugurated in Siliguri and Kanpur; benefits facilitated for 8,000+ PMAY Urban 2.0 beneficiaries, with another 1,200 applications submitted for approval.
• Analyst caution on disbursement quality — Abhijit Tibrewal (Motilal Oswal) flagged that strong Q2 FY 2026-2027 disbursements may partly reflect spillover from the realignment, effective April FY 2026-2027, in how disbursements are booked into AUM/loan book.

AAA Across All Four Agencies; Pass-Through Underway After Repo Hike

• CRISIL upgraded PNB Housing to AAA with stable outlook in Q2 FY 2026-2027 — the company is now rated AAA by all four domestic agencies: CRISIL, ICRA, CARE Ratings and India Ratings.
• Rate actions effective 1 November 2026 (Q3 FY 2026-2027) — following the recent 25 bps policy rate hike, management is evaluating a 10-15 bps increase in retail lending rates and 15-20 bps in corporate lending rates; it expects the overall NIM impact to remain broadly neutral to positive (period unspecified).
• Repo sensitivity — management expects the 25 bps FY 2026-2027 repo hike to lift cost of borrowings by ~9-10 bps, contemplating portfolio rate increases of 10-15 bps (8-10 bps immediately, potentially 12-15 bps by end of Q4 FY 2026-2027); a 50 bps repo rise would translate into ~20 bps cost-of-borrowings impact (period unspecified).
• Industry pass-through context — ~20 days after the 25 bps repo hike, management observed most housing finance companies have raised lending rates by 15-20 bps; pass-through is below the repo hike because borrowing mixes differ across lenders (repo-linked, MCLR, fixed deposits, NHB refinance), each following its own methodology submitted to the regulator.
• Borrowing cost gap vs AAA peers is minimal — PNB Housing's borrowing rate at 7.3%, the same as Tata's 7.3%; the company plans to reprice existing old borrowings, with new borrowings coming at better rates.
• Repricing benefit expected in FY 2027-2028 — MD & CEO Ajay Kumar Shukla said negotiations with bankers to reprice old borrowings began after the Q4 FY 2025-2026 AAA ratings, and he expects "real measurable benefit" in FY 2027-2028; benefits likely to translate in a phased manner, with some favourable deals already closed.
• Construction finance build-out — current book ~Rs.700 crore (Q2 FY 2026-2027); management is aiming to build a Rs.3,000 crore construction finance book in FY 2026-2027, cited as a high-NIM business to support margins.

Negative Credit Cost on Recoveries; Fraud Pool and Vintage Delinquency Watch Items

• GNPA improved to 0.91% — from 0.95% in Q1 FY 2026-2027; Rs.75 crore recovered from the written-off pool, driving a negative credit cost of 19 bps; retail written-off pool reduced to ~Rs.320 crore.
• Adjusted credit cost ~11 bps — analyst's calculation for Q2 FY 2026-2027 after adjusting for the Rs.75 crore of recoveries; management guided normalized credit cost at 10-12 bps for FY 2027-2028 once recoveries taper, and affirmed it should be stable post-normalization.
• Corporate fraud pool of ~Rs.650 crore as of September (Q2 FY 2026-2027) — CFO Vinay disclosed two accounts declared fraud and now being pursued for recovery, in addition to the Rs.320 crore retail pool.
• 24-month vintage 30+ delinquency rose from 0.2% to 0.4% QoQ — slide 23; CFO Vinay called it "not a significant jump," noting 90+ remained stable at 25-40 bps, and said management will deep-dive further; CEO added overall bounce percentage improved and remains well within control at the national level.

Affordable Yield Trade-off Contained; NCR Strength Is Footprint-Driven

• Affordable sourcing from prime/emerging branches dilutes overall yields by only 10-12 bps — the Roshni affordable vertical's standalone yield is flat, per MD & CEO Ajay Kumar Shukla; in September (Q2 FY 2026-2027), prime and emerging branches contributed over Rs.100 crore of affordable business without incremental infrastructure cost.
• Branch strategy intact — focus remains on opening more branches in tier 3 and tier 4 cities; metro-periphery sourcing attracts better customers/properties but involves a minor pricing compromise tied to property value.
• Delhi NCR strength is footprint-driven, not geography-specific — CEO attributed the higher AUM share/disbursement mix to the long-standing Delhi headquarters and dense branch network across Gurgaon, Delhi, Ghaziabad and Noida; builder-loan contribution remains insignificant.
• Prime disbursement mix ~60% self-employed / ~40% salaried — management said it does not want to compete much where nationalized banks are present, since banks focus on prime salaried customers; the team is purposefully structured with self-employed business expertise to protect margin and yields.
• Fee income at ~Rs.130 crore in Q2 FY 2026-2027 — CFO Vinay attributed the strength to disbursement growth of ~50% (excluding DA); emerging (Roshni) carries the highest fee as a percentage but at ~12-14% of overall monthly business its absolute fee value is lower.
• Distribution — 404 branches as of 30 Sep 2026 (234 Roshni/affordable, 88 emerging markets, 81 prime), strengthening tier-2/tier-3 presence.

Guidance Held at 2.4% ROA and 18-20% Growth; DA Sell-Downs From Q3

• ROA guidance maintained at 2.4% for FY 2026-2027 — despite Q2 printing 2.53% and H1 at 2.44%, ahead of the guided range; CFO Vinay attributed the elevated Q2 ROA to a one-off in overall interest income and reaffirmed guidance with no upgrade, stating normalized ROA stands at 2.4%, in line with Q1 FY 2026-2027.
• Growth guidance maintained at 18-20% for FY 2026-2027 — the current run-rate is 19% and the CEO indicated growth should improve from that level, though guidance was not formally raised.
• No FY 2027-2028 growth target yet — strategy work for FY 2027-2028 will begin in Q3 FY 2026-2027; the CEO's only directional comment being that "the idea is not to degrow."
• DA sell-downs to be evaluated starting Q3 FY 2026-2027 — CFO Vinay clarified there was no DA sell-down in Q2 FY 2026-2027 (only DA pool buying); sell-downs are part of a sustainable strategy to support NIM and ROA, enabled by the company having hit its stated book growth guidance; management is also exploring non-housing pool sell-down opportunities in Q3 FY 2026-2027, noting it is "very close" to principal business criteria (PBC) limits but has cushion and will ensure compliance.
• ROA/ROE path not quantified — responding to an analyst question on expanding ROA over the next two years (through FY 2028-2029), with the analyst citing a margin trend toward sustainable levels of ~3.5% (period unspecified), management pointed to DA sell-downs as part of the strategy; no specific ROA/ROE targets were quantified.
• NIM outlook — CFO Vinay said the shift toward non-housing loans and funding benefits will have a positive rub-off on both spread and NIM, but continuously rising leverage will partially offset the NIM gain; no quantified target or timeline was given. Management also sees no impact on demand or disbursement momentum from the 25 bps repo hike as of October 2026 (Q3 FY 2026-2027).
• Insurance commission changes (industry-wide, pending) — on the proposed changes still in discussion stage with final outcome pending, management believes consumer premiums could fall 30-40% if implemented as-is (timing unspecified), which it believes would expand the opportunity to sell more/combo products; PNB Housing is exploring offsets — sourcing more business from the market, pool sale/DA-out front income, higher processing fees, cost control, and focus on higher-NIM products.

AI POCs Move Toward Production; ICRA Sees 19-21% Sector AUM Growth

• AI pilots completed, deployment next — the company completed a voice AI POC for bucket-X calling, AI document processing and agentic AI hiring POCs, with the next couple of quarters focused on production deployment; an end-to-end ML collections suite has been built.
• ICRA's third-party forecast — management cited ICRA expecting affordable housing finance companies to deliver AUM growth of 19-21% in FY 2026-2027.
• RBI policy context — management cited RBI's recent 25 bps repo rate hike and policy guidance as reinforcing sector confidence.