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PNBHOUSING - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | PNBHOUSING | Market Cap | 20,992 Cr. | Current Price | 805 ₹ | High / Low | 1,142 ₹ |
| Stock P/E | 9.34 | Book Value | 690 ₹ | Dividend Yield | 0.62 % | ROCE | 9.46 % |
| ROE | 12.3 % | Face Value | 10.0 ₹ | DMA 50 | 911 ₹ | DMA 200 | 913 ₹ |
| Chg in FII Hold | -1.39 % | Chg in DII Hold | 2.34 % | PAT Qtr | 521 Cr. | PAT Prev Qtr | 626 Cr. |
| RSI | 28.1 | MACD | -32.8 | Volume | 8,81,720 | Avg Vol 1Wk | 10,96,236 |
| Low price | 746 ₹ | High price | 1,142 ₹ | PEG Ratio | 0.28 | Debt to equity | 3.62 |
| 52w Index | 15.0 % | Qtr Profit Var | 10.5 % | EPS | 86.3 ₹ | Industry PE | 16.7 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT declined from ₹626 Cr. to ₹521 Cr., showing pressure on earnings. EPS at ₹86.3 remains strong relative to price.
- Return Metrics: ROE at 12.3% and ROCE at 9.46% indicate moderate efficiency, acceptable but not industry-leading.
- Debt Position: Debt-to-equity ratio at 3.62 reflects high leverage, typical for housing finance companies but adds risk.
- Cash Flow: Dividend yield at 0.62% provides modest shareholder returns.
💹 Valuation Indicators
- P/E Ratio: 9.34, significantly lower than industry average of 16.7, suggesting undervaluation.
- P/B Ratio: Current Price ₹805 vs. Book Value ₹690 → ~1.17, trading close to book value, attractive for value investors.
- PEG Ratio: 0.28, very low, indicating strong growth-adjusted valuation.
- Intrinsic Value: Fundamentals and low valuation suggest intrinsic value higher than current price, offering margin of safety.
🏢 Business Model & Competitive Advantage
- PNB Housing Finance operates in retail housing loans and mortgage financing, a sector tied to real estate demand and interest rate cycles.
- Competitive advantage lies in established brand and distribution network, though competition from banks and NBFCs remains intense.
- High leverage is structural to the business model but requires careful monitoring of asset quality.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹750–820, near 52-week low and undervalued relative to peers.
- Long-Term Holding: Suitable for patient investors seeking exposure to housing finance; long-term returns depend on credit quality and interest rate environment.
Positive
- Low P/E ratio compared to industry average, indicating undervaluation.
- EPS at ₹86.3 supports earnings strength.
- DII holdings increased (+2.34%), showing domestic institutional confidence.
- RSI at 28.1 indicates oversold condition, potential rebound.
Limitation
- High debt-to-equity ratio (3.62) increases financial risk.
- Quarterly PAT declined sequentially.
- Dividend yield modest at 0.62%.
- Stock trading below DMA 50 (₹911) and DMA 200 (₹913), indicating bearish trend.
Company Negative News
- FII holdings reduced (-1.39%), showing lower foreign investor confidence.
- MACD negative (-32.8), signaling bearish momentum.
Company Positive News
- DII holdings increased significantly (+2.34%).
- Strong EPS relative to price supports valuation case.
Industry
- Housing finance industry P/E at 16.7, higher than PNB Housing’s 9.34, highlighting undervaluation.
- Sector outlook supported by urbanization and housing demand, but sensitive to interest rate cycles.
Conclusion
- PNB Housing Finance shows undervaluation with strong EPS but faces high leverage and earnings pressure.
- Attractive for value investors near ₹750–820, with potential rebound from oversold levels.
- Long-term holding requires monitoring of credit quality and macroeconomic conditions.
I can also prepare a peer comparison with other housing finance companies to highlight how PNB Housing stacks up in terms of valuation, leverage, and profitability. Would you like me to create that?