PNB Housing Finance Q2 profit declines

PNB Housing Finance has reported a 25 per cent decline in net profit at Rs 235 crore for the quarter ended September 2021 as compared to a net profit of Rs. 313 crore in the corresponding period a year ago.

During Q2FY22, the company’s net interest margin stood at 3 per cent compared to 3.5 per cent in the year-ago period.Net interest income stood at Rs 503 crore compared to Rs 651 crore, registering a decline of 23 per cent

PNB Housing Finance also announced to scrap the Rs 4,000 crore preferential issue. The company wished to raise equity capital to support the growth.

The company’s board of directors, on October 14, decided not to proceed with the preferential issue of Rs 4,000 crore that was approved on May 31.

The company has filed an application to withdraw its appeal to the Securities Appellate Tribunal.

Editorial Comment: Compared to its book value of Rs. 525, the scrip currently is available at just Rs. 514. The business of housing finance sector is showing strong revival and now at the current valuation, the scrip is a good pick with medium term investment angle. However in the very short term, the scrip is expected to show bearish trend and may decline for next few sessions.