PNB Housing Finance shares slide nearly 8%; brokerages flag Q3 earnings miss, maintain 'Buy'

Shares of PNB Housing Finance Ltd fell sharply on Thursday, declining 7.78 per cent to Rs 859, a day after the company reported its December quarter (Q3 FY26) earnings. A few brokerages highlighted that the company's year-on-year (YoY) profit fell short of expectations, weighed down by higher operating expenses.

Motilal Oswal Financial Services Ltd (MOFSL) said the quarter saw an "earnings miss" largely due to elevated opex. It noted that repayments remained high, resulting in slightly weaker loan growth during the quarter.

The brokerage highlighted that Q3 FY26 profit after tax (PAT) rose 8 per cent YoY to around Rs 520 crore, but this was a 5 per cent miss versus its estimates. Net interest income (NII) grew 11 per cent YoY to about Rs 770 crore, broadly in line with expectations. However, other income declined roughly 10 per cent quarter-on-quarter (QoQ) to nearly Rs 100 crore due to lower fee and investment income.

Operating expenses increased 17 per cent YoY to about Rs 240 crore, around 7 per cent higher than estimates. This included a one-time gratuity provision of Rs 6 crore linked to the implementation of new labour codes. As a result, pre-provision operating profit grew 8 per cent YoY to Rs 630 crore, but still missed estimates by about 5 per cent. MOFSL reiterated a 'BUY' rating on the stock.

JM Financial also described the quarter as mixed, citing weak disbursement momentum and higher costs. The brokerage said: "PNB Housing Finance (PNB HF) reported an overall mixed quarter with PAT declining ~11 per cent QoQ (+8 per cent YoY), 5 per cent below JMFe." It added that slower disbursement growth, particularly in the affordable housing segment, weighed on AUM growth, while higher-than-expected opex impacted profitability.

Despite near-term pressures, JM Financial noted that asset quality trends remained stable, with GS3 and NS3 at 1.04 per cent and 0.68 per cent, respectively, and credit costs continuing to stay negative, in line with the management guidance. It maintained a 'BUY' rating with a target price of Rs 1,180, "valuing the company at 1.3x FY28E BVPS."