At PNB Housing Finance, we see ourselves as more than a financier, we are partners in India’s aspiration to own a home. Our focus is on building an institution that families can trust for generations to come.
Dear Shareholders and
Valued Stakeholders,
It is a privilege and an honour to be writing to you as the Managing Director and Chief Executive Officer of PNB Housing Finance.
I wish to begin by expressing my sincere gratitude to each one of you for the trust you have placed in this institution through its journey of growth, challenging phases, and the patient, purposeful rebuilding that has brought us to where we stand today. Your support forms the very foundation of our existence, and underpins everything we strive to build.
FY26 was a pivotal year for the housing finance sector in India as the structural foundations continued driving that strength. Even as rising urbanisation continued to bring millions of families into cities and towns, Tier 2 and Tier 3 cities emerged as vibrant demand centres, backed by improving infrastructure, growing economic activity, and an expanding middle class that is ambitious and upwardly mobile. Affordability, while always a consideration, was supported by a softening interest rate environment, steady income growth, and a clear shift in aspiration towards home ownership.
Government policies have also played a constructive role in boosting this development. Schemes like the Pradhan Mantri Awas Yojana are bringing affordable home ownership within the reach of families who previously had limited access to the formal credit system. Regulatory bodies like the Reserve Bank of India and the National Housing Bank have created a conducive environment to strengthen the housing finance sector’s foundation.
There are, of course, broader macroeconomic and geopolitical developments that we continue to watch closely. Movements in crude oil prices, inflation, and interest rates have an important bearing on the overall economic environment.
However, we remain confident that the structural strength of India’s housing demand and the resilience of the sector will continue to support longterm growth. Backed by favourable demographics, rising homeownership demand and a supportive policy framework, the underlying story of India’s housing sector remains one of the most compelling globally, and we are well positioned to participate meaningfully in this journey.
Over the past few years, we have proactively worked towards solidifying our foundation. We have steadily strengthened our balance sheet, bolstered our collections infrastructure, rebuilt our loan book with a sharper focus on quality, and invested in digital, human and operational capabilities. The outcome is visible in our numbers, upgrade in our credit ratings, and most importantly, in the confidence of our stakeholders.
We have also made deliberate strategic choices about where we want to grow. Our focus in the Affordable Housing and Emerging Markets segments represents both a social commitment and a compelling business opportunity. These are the segments where India’s housing story is the most vibrant, demand is the most durable and our branch network and local relationships give us a competitive edge. Our ambition is to take this combined share to 50% within two years, and we are building the team, the technology and the distribution to achieve our goals.
I am pleased to share that FY26 was a year of strong, well-rounded performance for PNB Housing Finance.
Our retail loan book grew 16% YoY to `86,946 crore, taking our total loan book to `87,347 crore as on 31st March 2026. Disbursements picked up meaningfully through the year, with `9,355 crore in the fourth quarter alone, recording a 36% YoY and 50% QoQ jump — our strongest quarterly disbursement performance in recent years. For the full year, overall disbursement growth stood at `26,548 crore, a 21% YoY growth.
Our Prime segment continues to be the cornerstone of our retail lending portfolio, reflecting the Company’s strong presence among customers with established credit profiles and aspirational homeownership needs. In FY26, this segment recorded disbursements of `13,561 crore, delivering a healthy 18% YoY growth. The Emerging Markets segment was a standout performer, delivering 29% YoY growth in FY26 disbursements and maintaining its strong growth momentum. The segment has undergone strategic repositioning over the previous year, aligning with evolving market dynamics and customer needs.
After a challenging start to the year, the Affordable Housing segment returned to its growth path in Q4, with disbursements rising 6% and loan book growing by 61% YoY for the entire year. After a period of recalibration and strengthened underwriting, we are confident in the quality of what we are building here. We facilitated over 5,000 subsidies under PMAY-U 2.0 during the financial year with a target of facilitating 10,000 subsidies by August 2026, a meaningful milestone for deserving families who now have a home they can call their own.
We have taken a measured and selective approach to restarting our Corporate segment. With disbursements of `335 crore during the year under review and a corporate loan book of `401 crore as on 31st March 2026, our stance is deliberate and disciplined. Our focus is concentrated on reputed developers in select cities where demand is robust, project quality is high and opportunities are strong. We intend to maintain this segment within 3% of our overall book for FY27.
We demonstrated strong profitability during the year under review. Our net interest margin for the year stood at 3.68%. Profit after tax grew 18% YoY to `2,291 crore, while return on assets stood at 2.66% and return on equity at 12.73%. Our capital adequacy ratio remained robust at 27.26%, with Tier 1 capital at 26.89%, reflecting a balance sheet that is not just healthy today but is well-prepared for the growth tomorrow.
Our razor-sharp focus on asset quality has delivered positive outcomes, with our gross NPA dropping below 1% for the first time, standing at 0.93% as on 31st March 2026. This milestone is the result of steady, disciplined approach, driven by a stronger collection infrastructure, proactive borrower engagement, focused resolution of legacy cases and a commitment to maintaining portfolio quality across every segment. We recovered `332 crore from written-off pool accounts during FY26, resulting in a negative credit cost of 45 basis points.
We added 36 new branches during the year, taking our total network to 392 branches with 229 in the Affordable Housing segment and 85 in the Emerging Markets segment. Our deepening presence in the high-potential Tier 2 and Tier 3 markets and beyond will continue to help us become the true growth engines of India’s housing finance story over the next decade. New branches will continue to be added where the opportunity warrants it, but the priority is depth, not just breadth.
Our consistent focus on strengthening the business was acknowledged during FY26 through notable credit rating upgrades across agencies.
CARE Ratings Limited has upgraded the Company’s long-term rating from AA+ ‘Stable’ to AAA ‘Stable’ on 7th May 2026 with respect to deposits, bonds (including Tier 2 bonds), debentures and bank facilities. India Ratings and Research upgraded our rating from AA+ to AAA in Q3 FY26. ICRA assigned a rating of AA+ with Stable outlook for enhanced long-term bank facilities and reaffirmed ratings on existing instruments. Further, we continued to be rated AA+ with Stable outlook from Crisil as well.
These upgrades will help us avail lower borrowing costs, secure broader access to capital, and earn stronger confidence from our lending partners and investors.
Technology continues to play a pivotal role in shaping the future of PNB Housing Finance. We view technology not merely as an enabler of efficiency, but to create better experiences for our customers and stronger capabilities for our teams. During the year, we strengthened our digital ecosystem through the continued expansion of our in-house platform, Infinity, which has streamlined loan onboarding, enhanced productivity, and simplified customer interactions. We also advanced our use of artificial intelligence across key areas, enabling smarter decision-making and greater operational agility.
Our focus is on building a seamless, end-to-end digital journey that spans sourcing, underwriting, disbursement, servicing, and collections. We aim to achieve a completely paperless journey by FY27. By leveraging AI, data analytics, and automation, we aim to further strengthen risk management, improve customer engagement, and enhance operational excellence.
At PNB Housing Finance, our people are the heart of everything we do. We take pride in being not just a customer-centric organisation, but a people-focused one.
It is with deep gratitude and immense pride that I take this opportunity to acknowledge the efforts of our team of 7,000+ dedicated professionals who are part of our organisation. Their dedication, passion and resilience enable us to deliver sustainable value to our customers and stakeholders.
We have worked towards building an ecosystem that values integrity, care and learning that encourages our people to adapt, innovate, and lead with purpose. My deepest commitment is to foster an environment where professionals are empowered to realise their full potential and build enduring careers at PNB Housing Finance.
We continue to ensure the holistic wellbeing of our workforce, nurturing both their physical and mental health through initiatives. Investments in structured learning and skill development programmes have been made to ensure that every individual can grow, evolve, and lead. Open and transparent communication channels have been established to encourage a culture of trust.
This spirit of excellence and belonging is reflected in PNB Housing Finance being certified as a Great Place to Work for the third consecutive year, and featured in India's Top 75 Best Workplaces in BFSI and Best Workplace in the NBFC sector, a testament to our collective commitment to fostering a workplace where people feel valued, heard, and inspired.
More than a framework, ESG is the lens through which we make decisions, build relationships, and create value that endures.
At PNB Housing Finance, sustainability is not an isolated initiative, it is fundamentally embedded within our core business strategy. Our Affordable Housing segment Roshni continues to extend homeownership to low and middle-income families, making social equity a lived practice. We are deepening climate literacy across the organisation, strengthening our Diversity, Equity and Inclusion commitments, advancing robust governance and cybersecurity practices, and investing in communities through thoughtful CSR initiatives.
Our CSR initiatives are guided by our commitment to fostering inclusive and sustainable development. During the year, we continued our flagship interventions for construction workers and their families — providing accessible healthcare services at construction sites, supporting children’s education through scholarships, and empowering women with vocational training to help them gain financial independence.
These initiatives contribute to building healthier, educated, and economically resilient communities.
Underscoring our long-term commitment to responsible business practices, we were assigned an A+ ESG rating by a SEBI-registered rating provider this year.
We see this as an affirmation that we are on the right path. Our ESG journey is anchored in the same philosophy that guides everything we do at PNB Housing Finance, including our commitment to supporting aspirations, strengthening foundations, and creating value that families, communities, and stakeholders can depend on for the long term.
Looking forward, I am optimistic about our strategic direction and growth trajectory. Not just passive optimism that overlooks potential risks, but the grounded conviction of someone who sees a strong market, a well-positioned institution, and a team that knows how to execute.
India’s housing sector continues to witness robust demand. The Government’s commitment to housing through schemes like PMAY-U, supportive regulation, and infrastructure investment in smaller cities, creates a long runway for growth. The softening interest rate will bring in more borrowers and support overall credit growth. And within this environment, PNB Housing Finance has the brand, the balance sheet, the distribution, and the digital capability to grow with confidence.
The Affordable Housing and Emerging Markets segments will be our growth engines as we expect to take their combined share from 40% currently to ∼45% of the retail book by the end of FY27. We will grow our branch network thoughtfully, focus on making our existing distribution more productive, and continue to scale our digital capabilities. The Corporate segment will remain selective, disciplined, and relatively modest in our total book.
At PNB Housing Finance, we see ourselves as more than a financier, we are partners in India’s aspiration of owning a home. Our path ahead is guided by discipline, not shortcuts: deepening our reach into Affordable Housing and Emerging Markets segments, strengthening governance to match the scale we are building toward, and ensuring every rupee we deploy is backed by prudence. As we approach new milestones in our growth journey, our focus stays constant — building an institution that families can trust for generations to come.
A heartfelt note of thanks goes to our stakeholders — investors, customers, valued partners and employees — for their enduring trust and confidence. Your support inspires us to deliver with integrity, responsibility and purpose every day.
My sincere appreciation to our Board members for their invaluable guidance, encouragement and trust, which have provided the foundation for our progress and success in fostering a transparent, customer-centric operating environment.
I am also grateful to our regulators — the National Housing Bank, the Reserve Bank of India and the Securities and Exchange Board of India — for their continued guidance and support.
I wish to acknowledge the invaluable support of our promoters, rating agencies, lenders and bankers for their confidence, partnership and unwavering support. Their trust has strengthened our foundation and enabled us to pursue our growth ambitions with conviction. As we move forward, we remain committed to creating long-term value through purposeful growth, responsible innovation and disciplined execution.
Warm regards,
Ajai Kumar Shukla
Managing Director and Chief Executive Officer