PNB Housing bounces back after CEO shock—growth and asset quality in focus

Subscribe to enjoy similar stories. PNB Housing Finance Ltd has come full circle. Ajai Kumar Shukla took charge as managing director and chief executive officer on 18 December, bringing closure to the leadership vacuum created by the sudden resignation of Girish Kousgi on 31 July, an episode that had rattled investors.

The stock had slumped 18% on 1 August amid concerns over continuity. But management assurances on strategy and growth, followed by the appointment of a seasoned successor, helped restore confidence. Most of the losses have since been recouped.

Shukla, who joins from Tata Capital Housing Finance, brings nearly three decades of experience across sales, credit and risk in the mortgage business. ICICI Securities, which had earlier downgraded the stock to ‘Hold’, upgraded it to ‘Buy’ last week. With the stock currently at ₹962, just 2% below the levels seen before Kousgi’s resignation, the focus now shifts squarely to fundamentals.

Those fundamentals have strengthened. In the September quarter (Q2FY26), the lender’s return on equity (RoE) stood at 13%, the highest quarterly number since FY21. Return on assets (RoA) improved 19 basis points year-on-year to 2.73%.

Asset quality has steadily improved, without sacrificing growth despite intensifying competition. Gross and net stage-3 assets declined sharply, from 6.4% and 4.3% in Q1FY23 to 1% and 0.7% in Q2FY26, respectively. The lender has reported negative credit costs since FY25, aided by provision write-backs.

Early-bucket delinquencies have trended lower, pointing to better incremental loan quality. Net interest margin has remained stable at around 3.7%, as lower investment yields were offset by reduced cost of borrowing following cuts in the repo rate. Prime