PNB Housing margin narrows 6.09 points as quarterly expenses surge
YoY profit growth slowed as costs rose faster than revenue; management attributed a 19-bps sequential NIM decline to higher leverage and a Q4 true-up.
Filed 04 Aug 2026, 18:31 IST · after market close · PNB Housing Finance Ltd (PNBHOUSING)
Key takeaways
- Consolidated net profit grew 4.47% YoY as expenses rose 32.48%, outpacing revenue growth of 9.02%.
- Sequential operating margin narrowed 6.09 percentage points as expenses grew 268.81% against revenue growth of 3.75%.
- Management said the retail loan book grew 16% YoY to Rs 89,178 cr, alongside a Rs 146 cr pool buyout to accelerate loan growth.
Price around the results
Cost growth limited Q1FY27 profit conversion
PNB Housing's consolidated net profit rose 4.47% YoY, but fell 15.01% sequentially as pre-tax profit declined 15.93% from Q4FY26. The lower sequential tax rate, down 0.84 percentage points, partly cushioned the profit decline. Other income was just 0.27% of pre-tax profit, so reported earnings were not materially supported by that line.
Operating margin fell as expenses and interest rose
Expenses grew 32.48% YoY and 268.81% QoQ, faster than revenue in both comparisons, narrowing operating margin by 1.50 percentage points YoY and 6.09 percentage points QoQ. Interest expense also increased 8.45% YoY and 7.43% sequentially, adding to the pressure on pre-tax profit. Even after the decline, the 91.52% operating margin was 27.09 percentage points above the 64.43% median for 49 Financial Services peers that had reported.
Margin reversed the Q4 improvement while the loan book expanded
The margin decline follows a sharp improvement to 97.61% in Q4FY26 from 91.35% in Q3FY26, rather than marking a third straight quarterly fall. Management said higher leverage and the Q4FY26 NIM true-up reduced Q1FY27 NIM by 19 basis points sequentially. The company also said it recovered Rs 67 cr from the written-off pool during the quarter.
After-market filing leaves the stock reaction pending
The consolidated results were filed after market close on 4 August 2026, so there is no post-results price move to assess yet. Across the stock's eight prior results reactions, six were positive and two negative, with a median absolute move of 4.48%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,263 cr | ₹2,182 cr | +3.75% | +9.02% |
| Other income | ₹2 cr | ₹-10 cr | — | -66.67% |
| Expenses | ₹192 cr | ₹52 cr | +268.81% | +32.48% |
| Operating profit | ₹2,072 cr | ₹2,129 cr | -2.72% | +7.26% |
| Operating margin (%) | 91.52% | 97.61% | — | — |
| Interest | ₹1,339 cr | ₹1,246 cr | +7.43% | +8.45% |
| Depreciation | ₹16 cr | ₹19 cr | -14.70% | +11.29% |
| Profit before tax | ₹718 cr | ₹855 cr | -15.93% | +4.44% |
| Tax | ₹161 cr | ₹199 cr | -18.97% | +4.33% |
| Net profit | ₹557 cr | ₹656 cr | -15.01% | +4.47% |
| EPS (₹) | ₹21.39 | ₹25.17 | -15.02% | +4.24% |
Operating margin of 91.52% compares with a Financial Services sector median of 64.43% across 49 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Retail loan book grew 16% year over year to INR 89,178 crore in Q1 FY27.
- The company recovered INR 67 crore from the total written-off pool in Q1 FY27.
Expansion
- The company completed a pool buyout of INR 146 crore during Q1 FY27 to accelerate loan growth.
Problems & risks
- Higher leverage and the Q4 FY26 NIM true-up reduced Q1 FY27 NIM by 19 basis points sequentially.
What to watch
- Whether operating margin recovers from 91.52% after the 6.09-percentage-point sequential decline.
- Whether retail loan-book growth remains near the 16% YoY reported in Q1FY27.
- Whether recoveries build on the Rs 67 cr recovered from the written-off pool.