PNB Housing Finance targets 20% loan growth in FY27

Growth guidance steps up for FY27

PNB Housing Finance has set an aggressive growth target for FY27, guiding for 18-20% year-on-year expansion in its gross loan portfolio. The company is aiming to grow faster than the broader housing finance industry, which is estimated to be expanding at around 11% annually. Management’s plan relies on pushing deeper into higher-yielding segments while expanding physical distribution. The company also reiterated that retail will remain the core focus, even as it gradually increases corporate lending from a small base. The push comes as housing loan demand remains supported by structural drivers and policy focus on affordable housing.

Targeting a ₹1 lakh crore milestone by FY27

The company has stated an ambition to cross the ₹1 lakh crore loan book mark by FY27, signaling a step-up from its March 2026 level. As of 31 March 2026, PNB Housing Finance reported a retail loan book of ₹86,946 crore and a total loan book of ₹87,347 crore. Earlier snapshots also show the pace of scaling: as of 30 June 2025, the retail loan book stood at ₹76,923 crore and total loan book at ₹77,752 crore. The company’s strategy indicates that incremental growth is expected to come disproportionately from affordable and emerging market segments.

Mix shift towards affordable and emerging segments

A central pillar of the plan is the deliberate shift in portfolio mix towards affordable and emerging market loans, which typically carry higher yields than the prime segment. Management indicated that emerging and affordable loans were 40% of the loan book and are expected to rise to 44-45% over the next two years, and subsequently to 48-50%. Another stated objective is to lift the share of affordable and emerging segments from 40% to 50% within two years. In contrast, the prime segment was described as being on a more moderate growth path of about 10%.

This mix change is also supported by segment performance disclosures. Affordable and emerging market share in retail loan assets was 40% as of 31 March 2026, up from 37% as of 31 March 2025. Separately, disclosures from FY26 also noted affordable and emerging segments at 38% of retail loan assets, with 34% year-on-year growth in those segments.

Branch expansion to feed distribution-led growth

PNB Housing Finance has invested in physical expansion to improve sourcing and deepen penetration in targeted markets. It opened 85 branches across FY25 and FY26, which management described as key growth drivers. In another operating update, the company said it added 40 new branches in the past year to reach 198, with a target of 250 branches by the end of FY26.

The company has also explained that its branch strategy involves a continuous reallocation of centers to align with segment focus, including a shift toward Tier 2 and Tier 3 city coverage. It stated that its Emerging Markets vertical is focused on such cities, with 50 branches across 12 target states.

Funding plans and margin levers

Alongside growth, the company has outlined funding and margin actions. Managing Director and CEO Ajai Kumar Shukla said the company tends to raise ₹2,000-₹2,500 crore via long-term funds each month and uses multiple sources of borrowing based on the best available rates. Another stated plan is to raise up to ₹30,000 crore in long-term funds in FY27.

On profitability, management guided for net interest margin (NIM) to be maintained in the 3.55-3.65% range, with three stated drivers: a higher share of affordable and emerging loans, expected credit rating improvement, and a shift in borrowing benchmark. The company said it expects a credit rating upgrade to AAA from AA+ and also plans to gradually move bank borrowings toward repo-linked loans versus MCLR-linked loans.

Recent operating performance cited by management

PNB Housing Finance pointed to strong disbursement momentum and retail book growth as indicators supporting its guidance. It stated that retail loan disbursements were the highest ever in Q4, and that Q4 is typically a busy quarter for lenders. For the March quarter, the company reported disbursements of ₹9,355 crore, up 36% year-on-year and 50% quarter-on-quarter. It also disclosed nearly ₹6,000 crore in disbursements in one quarter, up 20% sequentially.

For FY26, the company said overall retail disbursement growth for the full year came in at 19%. It also highlighted activity under government-linked housing support, stating it facilitated 5,000 subsidies under PMAY.

Sector context: affordable housing demand remains a key driver

The company’s strategic tilt aligns with a broader industry trend toward affordable housing. The housing loan market is projected to grow at a compound annual growth rate of 8.54% through 2034, according to the sector context provided. The affordable housing segment has been described as a high-growth engine, expected to expand by 29-30% in FY24-FY25. In industry comparisons cited in the same context, Affordable Housing Finance Companies reported about 29% growth in FY24.

Analyst positioning and stated price targets

Brokerage commentary referenced in the provided material remains positive on the stock. Motilal Oswal reiterated a ‘Buy’ rating with a price target around ₹1,200, and Morgan Stanley reiterated an ‘Overweight’ rating with a price target around ₹1,160. The supportive factors cited include guidance for sustained retail growth and an emphasis on higher-yielding segments.

Key numbers at a glance

Why the strategy matters for investors

The roadmap highlights a trade-off that investors will track closely. Higher-yielding affordable and emerging market loans can support margins, but faster scaling can also bring operating and credit execution demands, especially in self-employed and non-salaried borrower profiles mentioned in the company’s emerging markets strategy. Management’s margin plan depends on mix improvement, borrowing cost levers, and a credit rating upgrade to lower funding costs. The company has also said corporate loans will rise to 3% of the loan book in FY27 and to 7-8% over three years, which may influence blended yields and risk mix.

Conclusion

PNB Housing Finance is entering FY27 with clear guidance: 18-20% loan growth, a push to lift affordable and emerging market share toward 48-50%, and NIM maintained around 3.55-3.65%. Execution will be shaped by branch-led distribution, funding diversification, and progress on borrowing cost levers such as a potential move to AAA and a higher share of repo-linked liabilities. Investors are likely to focus on whether the stated mix shift translates into stable margins while sustaining asset quality as the loan book scales toward the ₹1 lakh crore milestone.