PNB Housing (PNBHOUSING)

FairStock Score: 67/100 — STEADY

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Price is below Graham Number: ₹1,007.45 vs ₹1,121.70, implying ~26.47% margin of safety
• P/E of 9.56 and P/B of 1.56 with ROE of 13.34% and profit growth of 23.04% give a reasonable growth-at-a-price profile, with PEG at 0.82
• Piotroski F-Score of 7/9 suggests sound fundamentals across profitability, leverage and operating efficiency
• Latest quarter sales of ₹2,110 Cr and net profit of ₹521 Cr show continuing business momentum; sales growth 13.07% and profit growth 23.04% support the story

Concerns

• High leverage: Debt/Equity is 3.70 and Free Cash Flow is -₹8,300 Cr; the company depends on borrowings to fund growth, so liquidity and credit risks are elevated
• Altman Z-Score of 0.77 is low, signaling possible balance-sheet stress, even though the metric is less suited for lenders
• Dividend yield is just 0.61%, leaving a thin income cushion; returns depend heavily on growth and valuation re-rating
• Promoter holding at 28.04% is not high, so governance and strategic decisions need careful monitoring

AI Analysis

At ₹1,007.45, PNB Housing trades below my Graham number of ₹1,121.70, leaving a margin of safety of roughly 26.5%. A P/E of 9.56 and a P/B of 1.56 are reasonable for a housing finance company earning an ROE of 13.34%. The latest quarter shows sales of ₹2,110 crore and net profit of ₹521 crore, while full-year sales and profit growth are 13.07% and 23.04% respectively. That kind of profit expansion deserves notice, especially at a PEG of 0.82. Still, I must discipline myself. A housing finance company is a leveraged asset business; the debt/equity ratio of 3.70 is high, and the free cash flow of -₹8,300 crore is a reminder that every rupee of loan growth consumes cash before it generates returns. I do not rely heavily on Altman Z or EV/EBITDA for a lender; 0.77 and 746.28 are not meaningful for this model. The Piotroski F-score of 7/9 gives some comfort that the company is not quietly deteriorating. The moat here is not a consumer brand; it is access to low-cost capital, underwriting discipline, and distribution. With promoter holding at 28.04%, minority shareholders are along for the ride, so governance matters. The dividend yield of 0.61% is thin; my return will have to come from growth and multiple re-rating. Would I call it a stalwart? ROE is below 15 and leverage is high, so it is not a superb franchise. But at 9.56 times earnings, with profit growing 23%, it is an adequately priced growing financial business. If loan quality holds and the housing cycle stays supportive, the margin of safety may be realised. If credit costs rise, the leverage will amplify the pain. I would start small and keep watching.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer