UBS has maintained its buy rating on PNB Housing Finance with a target price of ₹1,200 per share, calling Q2FY26 a steady quarter marked by stable margins, improving asset quality, and disciplined cost control. The brokerage said the company’s management remains focused on its strategy of expanding in the emerging and affordable housing segments, which now constitute 38% of the loan book.
UBS highlighted several operational takeaways from management: the base rate was reduced by 10 basis points during the quarter, while the cost of funds declined by nearly 15 basis points in the first half. The company maintained its FY26 NIM guidance at 3.7%. The rise in gross NPAs within the affordable portfolio was attributed to natural seasoning, though levels remain well below industry peers.
The brokerage noted that disbursements were temporarily impacted by the monsoon but are expected to normalise in the second half. UBS added that a ₹700 million expected credit loss (ECL) write-back on a repaid wholesale account led to a net write-back of 55 basis points during the quarter, further strengthening profitability visibility.
