Morgan Stanley has upgraded its view on PNB Housing Finance following strong June-quarter results, citing accelerated retail loan growth and improved market share, while maintaining a cautious stance on LIC Housing Finance owing to weaker core retail business.
Morgan Stanley has become more positive on PNB Housing Finance after the lender’s June-quarter results, pointing to faster retail loan growth, better market share trends and a valuation it sees as more appealing. The brokerage also kept a clear preference for PNB Housing over LIC Housing Finance, saying the latter’s core retail business remained weaker and that it was still losing ground in home loans.
In its latest note, Morgan Stanley kept an “Overweight” rating on PNB Housing Finance and nudged its target price to ₹1,420 from ₹1,405, implying about 27% upside from the reference price used in the report. The brokerage said underlying retail disbursements rose by more than 50% year on year after an accounting adjustment, and that this strength justified higher loan-growth estimates for fiscal years 2027 through 2029. It now expects retail loans to grow at about 20% over fiscal years 2026 to 2029, helped by expansion in affordable and emerging housing finance, and said net interest margins may have already bottomed. Morgan Stanley also argued that PNB Housing’s secured loan book leaves it better placed than many non-bank lenders if interest rates remain volatile. By contrast, it kept an “Underweight” view on LIC Housing Finance, saying the company’s individual lending franchise was softer, its growth in housing loans and loans against property was weak, and its home-loan market share continued to slip.
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