PNB Housing Finance reports strong Q3 FY25 performance with 42.8% profit growth

PNB Housing Finance Limited, a leading name in India’s housing finance sector promoted by Punjab National Bank, showcased strong growth and operational resilience in its third-quarter and nine-month financial performance for FY2024-25, ending December 31, 2024. The company’s focus on retail expansion, particularly in affordable and emerging markets, has cemented its position as a key player in the housing finance industry.

What Drove PNB Housing Finance’s Record Q3 Growth?

PNB Housing Finance recorded a 42.8% year-on-year (YoY) increase in net profit for Q3 FY25, amounting to ₹483.3 crore, supported by a 17% growth in Net Interest Income (NII) to ₹695.7 crore. The growth was primarily fueled by robust retail disbursements, which rose by 31% YoY to ₹5,380 crore during the quarter.

• Affordable housing loans: A key driver, with a remarkable 126.8% YoY growth to ₹920 crore, reflecting the company’s strategic focus on catering to underserved segments.
• Emerging markets segment: Contributed ₹1,105 crore, growing 39.3% YoY.

Retail loan assets increased by 17.5% YoY to ₹70,676 crore, further reinforcing the company’s commitment to retail-focused growth.

How Is Asset Quality Improving at PNB Housing Finance?

A highlight of the financial results is the significant improvement in asset quality. The Gross Non-Performing Assets (GNPA) ratio declined to 1.19% as of December 2024, compared to 1.73% in the same period last year.

The company’s efforts in recovery and portfolio management were evident as ₹53 crore was recovered from the retail written-off pool in Q3 FY25. The robust asset management strategy has also led to a reduction in corporate loan exposure, which contracted by 43.8% YoY to ₹1,241 crore.

Why Is the Affordable Housing Segment Critical to Growth?

The affordable housing segment has been a standout performer for PNB Housing Finance. Doubling its loan asset base within nine months to ₹3,838 crore, this segment underscores the company’s alignment with India’s housing aspirations.

The partnership with the Pradhan Mantri Awas Yojana Urban 2.0 initiative is a testament to the company’s role in driving government-backed housing programs. Through this collaboration, PNB Housing Finance aims to support eligible beneficiaries with interest subsidies, broadening its impact on affordable housing.

How Is PNB Housing Finance Positioned Financially?

With a Capital to Risk-Weighted Assets Ratio (CRAR) of 28.8%, of which Tier I capital contributes 28.0%, PNB Housing Finance is well-capitalized to navigate market dynamics. The company also secured refinancing sanctions from the National Housing Bank (NHB) worth ₹5,000 crore and an external commercial borrowing (ECB) sanction of USD 100 million in Q3 FY25.

The Return on Assets (ROA) improved to 2.48% (annualized) for 9M FY25, reflecting increased profitability. Net profit for the nine-month period rose by 29.7% YoY to ₹1,385.8 crore, driven by operational efficiency and a 7.0% YoY increase in NII to ₹2,015.3 crore.

Expert Insights on Future Prospects

Girish Kousgi, Managing Director & CEO of PNB Housing Finance, emphasized the company’s retail-oriented strategy and improving portfolio quality. He noted, “Our affordable segment has delivered robust disbursement growth of 127% YoY during the quarter. The company’s pan-India presence positions us to tap the growing demand for housing finance effectively.”

With retail loan disbursements showing steady growth and a robust recovery framework, PNB Housing Finance appears poised for sustained performance in the evolving housing finance market.

How Does PNB Housing Finance Align With India’s Housing Needs?

PNB Housing Finance’s strategic pivot towards retail lending, particularly in affordable housing, aligns with India’s growing housing demand. The company’s diversified portfolio and nationwide reach ensure that it remains a key enabler in providing financial access to underserved markets.

As government initiatives like Pradhan Mantri Awas Yojana gain momentum, companies like PNB Housing Finance are well-placed to support India’s housing infrastructure development goals while maintaining robust financial performance.