Jefferies maintains hold on PNB Housing Fin, revises target to Rs 505

Jefferies has maintained hold rating on PNB Housing Finance in the long term and revised target price to Rs 505 from Rs 635. Shares of PNB Housing Finance ended up 4.3% at Rs 510.25 on Sunday at Muhurat trading while the BSE Sensex closed 192.14 points up at 39,250.20.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 2229.71 crore, down 0.05% from last quarter sales of Rs 2230.93 crore and up 23.31% from last year same quarter sales of Rs 1808.26 crore. The company has reported net profit after tax of Rs 366.81 crore in the latest quarter.


Investment Rationale

Profit after tax in the second quarter rose 45% from year ago mainly due to lower tax, said Jefferies. At 0.9 times book value, valuation appears reasonable, but poor loan growth visibility, concerns around margins and slippages in developer book and low tier 1 capital would weigh on valuations, said Jefferies.