PNB Housing share price target: What ICICI Securities says on new MD & CEO

ICICI Securities has upgraded PNB Housing Finance to 'Add' from 'Hold', citing valuation comfort and the onboarding of a new Managing Director and Chief Executive Officer as a potential positive catalyst. The brokerage retained its target price at Rs 970, valuing the stock at 1.25 times estimated FY26 book value.

ICICI Securities said the appointment of Mr Ajai Kumar Shukla, who brought over 30 years of experience in the mortgage industry, helped resolve concerns around leadership continuity following the sudden exit of the previous MD in July 2025. The brokerage expected the management transition to be smooth and minimally disruptive, given the strong operational foundation laid by the earlier leadership.

The brokerage noted that after strengthening its retail asset franchise over FY24–25, PNB Housing Finance had shifted focus towards improving profitability. It highlighted that the company delivered its highest quarterly return on equity since FY21 at over 13 per cent by September 2025, reflecting sustained improvement across financial metrics. ICICI Securities added that Mr Shukla’s prior experience across critical verticals such as sales, credit and risk should support the company’s ability to sustain growth momentum.

On asset quality, ICICI Securities pointed out that early-bucket delinquencies remained benign, with 30-plus day delinquencies in loans originated over the past 12 and 24 months at 0.22 per cent and 0.61 per cent, respectively, indicating improving quality of incremental growth.

The brokerage expects PNB Housing Finance to deliver asset under management growth of 18 per cent each in FY26 and FY27. This was projected to translate into return on assets of 2.5 per cent and 2.2 per cent, and return on equity of 12 per cent and 11 per cent, respectively. ICICI Securities said the company appeared well positioned to meet its FY26 AUM growth guidance of 17–18 per cent, now that the top management team was fully in place.

ICICI Securities said retail housing is likely to remain the core business, with incremental growth driven by higher-yielding affordable housing and emerging segments. The brokerage noted that despite intense competition, PNB Housing Finance had successfully scaled its affordable housing portfolio while maintaining strong asset quality. Management guidance indicated a targeted AUM of Rs 1 lakh crore by FY27, with a portfolio mix of 65 per cent prime, 15 per cent affordable, and 20 per cent emerging businesses.

The brokerage added that the company had guided for margins of 3.6–3.7 per cent and continued improvement in asset quality, supported by a steady decline in gross non-performing assets.