ICICI Securities has joined Morgan Stanley in maintaining a bullish stance on PNB Housing Finance, issuing a 'Buy' rating with a target price of ₹1,350 in its research report dated August 5, 2026. The brokerage's target price is based on 1.5x P/B September 2027E, reinforcing the positive sentiment that has emerged around the housing finance company. This adds to Morgan Stanley's earlier recommendation of an 'Overweight' rating with a target price of ₹1,420, implying an upside of 27% from reference prices.
The latest quarterly results demonstrate PNB Housing Finance's robust execution capabilities, with the company maintaining strong AUM growth at 15% year-on-year and 3% quarter-on-quarter in Q1FY27. According to ICICI Securities, this performance was achieved despite shifting to a cheque realisation-based disbursement recognition, which resulted in 18% YoY growth (56% YoY on handover basis). Management expectations for Q2FY27 are particularly optimistic, with projections of a 60-70% quarter-on-quarter surge in disbursements and 2.5-2.7x QoQ expansion in the affordable segment. Overall AUM growth is expected to hover around 18-20% year-on-year, with affordable housing potentially growing at 50-60% in FY27.
According to Morgan Stanley's analysis, PNB Housing Finance maintained its post-pandemic home loan market share and delivered consistent improvement in retail loan growth, whereas LIC Housing Finance continued to lose market share in individual home loans. The brokerage believed PNB Housing Finance offered a stronger earnings profile because of faster loan growth and improving return on equity. ICICI Securities highlighted that emerging, affordable and corporate loans will likely drive incremental growth, offering better yields than prime housing, which contributes 59% of total loans as of June 2026. The lender's retail-focused strategy and changing loan mix should support profitability over the medium term, while LIC Housing Finance remained more exposed to slower-growing segments.
Morgan Stanley retained an 'Underweight' rating on LIC Housing Finance, citing slower growth in its individual lending business, particularly across Housing Loans and Loan Against Property. The report pointed to a decline in home loan market share and said the company's franchise was losing momentum compared with peers. The brokerage argued that PNB Housing Finance's stronger retail execution, improving loan mix and better growth outlook justified its preference within the housing finance space, even as both companies operated in the same sector. ICICI Securities' recommendation reinforces this preference, maintaining that PNB Housing Finance offers superior fundamentals and growth prospects compared to its competitor.
