PNB Housing Finance shares gain 2% in early trade amid solid Q1 numbers. At 01:02 pm, the stock traded flat at Rs 695 on the NSE.

The consolidated net profit surged 48% YoY in the April-June quarter, backed by robust loan growth and better asset quality. The non-banking financial’ s bottom line jumped 24% on a serial basis to Rs 347 crore. 

Its loan assets augmented 5% to Rs 60,395 crore last year, and retail loan assets grew 11% YoY to Rs 56,978 crore in June, 94% of the loan assets.

Besides, corporate loans fell 45% from the last year to Rs 3,416 crore. The disbursements rose 7% YoY to Rs 3,686 crore in the June quarter. The gross non-performing asset ratio plunged to 3.76% from 6.35% a year ago, while the net non-performing asset ratio stood at 2.59%. Its net interest income enhanced by 70% YoY to Rs 629 crore.

The company accomplished a rights issue of Rs 2,493.8 crore in May with around 1.21 times subscription. It recorded contributions from 4 shareholders, counting PNB, Carlyle, Ares SSG, General Atlantic and large domestic and foreign institutional investors. The rights issue proceeds were used to fund strategic growth plans and capitalise on the available growth chances.

Morgan Stanley is bullish and has a ‘buy’ rating with a target price of Rs 825 per share. It expects a re-rating of the stock as risk insight diminishes concerning the asset quality.

PNB Housing Finance stock gave a return of 51.33% over six months. Thus, significantly outperforming the benchmark Nifty50 index, which provided a return of 9.42% over the same duration.