PNB Housing Finance IPO - Fast Growth, Supportive Parent, PE Not Selling, Reasonable Valuations

India Housing Fin Cos: At the Cusp of a De-Rating

PNB Housing Finance Pre-IPO Review - Transformed into a Growth Leader

Value investor- India mid & small caps

Bhaskar Chakraborty

Equity Bottom-Up

PNB Housing Finance Ltd / Equity Bottom-Up

<ul><li><a href="https://www.smartkarma.com/entities/23613" target="_blank" data-smartkarma-citation="entities:23613:1">PNB Housing Finance Ltd (PNBHOUSI IN)</a> is India’s 5<sup>th</sup> largest housing finance company (HFC) focused on the mass affluent segment.</li><li>India’s housing finance market is growing at 18% Cagr, with PNB Housing registering a Cagr of 54% over the same period.</li><li>Its current branch network is 1/4<sup>th</sup> the size of its 4 larger competitors. With increased penetration, it can sustain its loan growth longer than its competitors.</li><li>Focus on mass affluent segment in home finance and granular loan book in corporate finance has ensured industry-leading asset quality.</li><li>Though spreads are likely to narrow a bit, there is significant room to improve ROE via financial leverage.</li><li>Company is trading at 1 SD below its mean Price to Book. With superior growth and asset quality and improving ROE outlook, we find valuations attractive. BUY for 30% upside.</li></ul>

PNB Housing Finance Ltd (PNBHOUSI IN) is India’s 5th largest housing finance company (HFC) focused on the mass affluent segment.India’s housing finance market is growing at 18% Cagr, with PNB Housing registering a Cagr of 54% over the same period.Its current branch network is 1/4th the size of its 4 larger competitors. With increased penetration, it can sustain its loan growth longer than its competitors.Focus on mass affluent segment in home finance and granular loan book in corporate finance has ensured industry-leading asset quality.Though spreads are likely to narrow a bit, there is significant room to improve ROE via financial leverage.Company is trading at 1 SD below its mean Price to Book. With superior growth and asset quality and improving ROE outlook, we find valuations attractive. BUY for 30% upside.

PNB Housing Finance Ltd

PNB Housing: Growth on the Menu, BUY