PNB Housing shares decline 6% after Q1 earnings miss estimates

The brokerage house has also revised its stance on the stock to "hold" with price target revised to Rs 785 per share from Rs 795 per share.

“GNPA rose QoQ as a stressed developer account slipped. We expect loan growth to moderate. Spreads may stabilise. We expect EPS growth to be modest and returns to be capped over FY19-21E. At 1.4x FY 20E BV, valuations appear reasonable, but our key concern is around stress in the real estate sector and scope for more slippages in its developer book,” it said.

Net interest income registered a growth of 45 percent to Rs 625.50 crore from Rs 432.8 crore. The company's net interest margin —  a key gauge of profitability — rose to 3.14 percent in June quarter from 2.74 percent a year ago, it said.

Gross non-performing assets (NPA) stood at 0.85 percent of the loan assets as on June 30, 2019, as against 0.43 percent as on June 30, 2018. At Asset Under Management (AUM) level, gross NPA was at 0.76 percent. Net NPA stood at 0.67 percent of the loan assets as against 0.33 percent last year.

The AUM stood at Rs 88,332.9 crore as on June 30, 2019, up from Rs 68,577.5 crore a year ago.

"Amidst the macroeconomic challenges, the company continued to register growth across the business and financial vectors. In the current environment, we are cautious on lending to corporate houses and focusing more on retail business, cost efficiencies, maintaining adequate liquidity, diversified borrowings and healthy asset quality across segments," PNB Housing Finance managing director Sanjaya Gupta said.

The company also raised $100 million (around Rs 690 crore) from International Finance Corporation (IFC), a member of the World Bank Group, to finance the purchase of affordable housing projects, it said in a regulatory filing on Monday.