PNBHOUSING - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.3
| Stock Code | PNBHOUSING | Market Cap | 21,421 Cr. | Current Price | 823 ₹ | High / Low | 1,142 ₹ |
| Stock P/E | 9.53 | Book Value | 690 ₹ | Dividend Yield | 0.61 % | ROCE | 9.46 % |
| ROE | 12.3 % | Face Value | 10.0 ₹ | DMA 50 | 903 ₹ | DMA 200 | 911 ₹ |
| Chg in FII Hold | -1.39 % | Chg in DII Hold | 2.34 % | PAT Qtr | 521 Cr. | PAT Prev Qtr | 626 Cr. |
| RSI | 33.9 | MACD | -35.8 | Volume | 24,22,439 | Avg Vol 1Wk | 13,17,242 |
| Low price | 746 ₹ | High price | 1,142 ₹ | PEG Ratio | 0.29 | Debt to equity | 3.62 |
| 52w Index | 19.4 % | Qtr Profit Var | 10.5 % | EPS | 86.3 ₹ | Industry PE | 16.7 |
📊 Analysis: PNB Housing trades at ₹823 with a low P/E of 9.53 compared to the industry average of 16.7, suggesting undervaluation. Fundamentals are moderate with ROE at 12.3% and ROCE at 9.46%, but high debt-to-equity ratio (3.62) raises leverage concerns. EPS of ₹86.3 is strong, and PEG ratio of 0.29 indicates attractive valuation relative to growth. Dividend yield of 0.61% provides modest income support. Technicals are weak (RSI 33.9, MACD negative, trading below DMA 50 & 200), showing bearish momentum. Overall, the stock offers value but carries risks due to high debt and earnings volatility.
💡 Entry Price Zone: Ideal accumulation range is ₹760–₹800, closer to the 52-week low (₹746) and below DMA levels. Current price is slightly above fair value zone.
📈 Exit / Holding Strategy: If already holding, consider a medium-term holding period of 2–4 years to benefit from undervaluation and potential housing finance demand. Exit strategy: partial profit booking near ₹1,050–₹1,100 if valuations stretch, while monitoring debt levels and quarterly profitability.
Positive
- Low P/E (9.53) compared to industry average (16.7), indicating undervaluation.
- Strong EPS of ₹86.3 supports earnings base.
- PEG ratio of 0.29 suggests attractive valuation relative to growth.
- DII holdings increased (+2.34%), showing domestic institutional support.
- Dividend yield of 0.61% provides modest income.
Limitation
- High debt-to-equity ratio (3.62) raises leverage risk.
- ROCE (9.46%) is relatively weak compared to peers.
- Stock trading below DMA 50 (903) and DMA 200 (911), showing weak technical trend.
- RSI at 33.9 indicates oversold conditions but also bearish sentiment.
Company Negative News
- Quarterly PAT declined from ₹626 Cr. to ₹521 Cr.
- FII holdings reduced (-1.39%), showing declining foreign investor confidence.
Company Positive News
- DII holdings increased significantly (+2.34%), reflecting domestic institutional confidence.
- Quarterly profit variation positive at 10.5%, showing some recovery momentum.
Industry
- Industry PE at 16.7, higher than PNB Housing’s valuation, suggesting peers are more expensive.
- Housing finance sector benefits from rising demand for affordable housing and government initiatives.
Conclusion
✅ PNB Housing is undervalued with strong EPS and attractive PEG ratio but carries high debt risk. Ideal entry is ₹760–₹800. Long-term investors should monitor debt levels and profitability before committing. Existing holders may exit near ₹1,050–₹1,100 on rallies while retaining core positions for medium-term growth.