PNB HOUSING FINANCE LTD Q2 CONCALL: FY27 LOAN-BOOK GROWTH GUIDANCE OF 18–20%, NORMALIZED ROA TARGET OF 2.4%, AFFORDABLE & EMERGING PORTFOLIO SHARE TARGET OF 45% AND IMPROVING NET INTEREST MARGINS

• Management maintained FY27 loan-book growth guidance of approximately 18–20%, supported by strong retail disbursements and expanding affordable housing operations. • Management expects loan-book growth momentum to remain healthy during H2 FY27, traditionally a stronger period for housing finance disbursements. • Management indicated that growth could improve from the current 19% YoY trajectory but has not increased its formal FY27 guidance. • Management did not provide numerical loan-book growth guidance for FY28. • Management maintained normalized return on assets guidance of approximately 2.4%, supported by portfolio growth, stable asset quality and operating efficiency. • Management targets affordable housing and emerging-market loans to contribute approximately 45% of the retail loan book by FY27-end, compared with around 41% currently. • Management expects the increasing contribution from affordable and emerging-market loans to support higher portfolio yields and gradual margin improvement. • Management expects normalized credit costs of approximately 10–12 basis points after the impact of exceptional recoveries subsides. • Management expects net interest margins to remain stable to improving on an adjusted basis, supported by portfolio repricing and higher-yielding loan growth. • Management plans to increase retail lending rates by approximately 10–15 basis points and corporate lending rates by around 15–20 basis points. • Management indicated that the lending-rate revisions were planned for implementation from 1 November 2026. • Management expects these pricing actions to help offset potential increases in borrowing costs. • Management estimated that a hypothetical 25-basis-point policy-rate increase could raise borrowing costs by approximately 9–10 basis points. • Management estimated that a hypothetical 50-basis-point rate increase could increase borrowing costs by approximately 20 basis points. • Management expects the overall NIM impact of planned lending-rate revisions to remain broadly neutral to positive. • Management expects gradual margin improvement through higher-yielding affordable housing, emerging-market lending, portfolio repricing and funding-cost optimization. • Management cautioned that increasing leverage could partially offset improvements in underlying net interest margins. • Management expects its recently obtained AAA credit ratings to support more competitive borrowing costs over time. • Management indicated that the borrowing-cost benefits from AAA ratings are likely to become more measurable during FY28 rather than immediately. • Management plans approximately ₹2,000 Cr of portfolio buyouts during FY27 to support loan-book growth. • Management expects portfolio buyouts to include home loans and loan-against-property exposures. • Management plans to evaluate direct assignment sell-down opportunities from Q3 FY27 to improve capital efficiency and manage portfolio composition. • Management clarified that portfolio buyouts and direct assignment sell-downs are separate transactions with different objectives. • Management indicated an aspiration to expand the construction-finance loan book to approximately ₹3,000 Cr during FY27. • Management expects construction finance to provide higher-yielding lending opportunities while maintaining disciplined underwriting. • Management expects affordable housing growth to benefit from additional sourcing through existing prime and emerging-market branches. • Management expects this cross-sourcing strategy to increase affordable loan origination without proportionately increasing branch infrastructure costs. • Management plans continued investment in affordable housing branches and personnel, particularly in Tier 3 and Tier 4 markets. • Management expects emerging-market lending to remain a major growth driver through customer expansion and differentiated underwriting. • Management intends to maintain its focus on self-employed borrowers and loan-against-property customers rather than aggressively competing on low-yield salaried housing loans. • Management expects differentiated underwriting and customer selection to help protect portfolio yields and profitability. • Management expects the nationwide branch network to support sustained retail loan growth and deeper penetration of affordable housing markets. • Management continues to support PMAY Urban 2.0 initiatives to expand housing finance accessibility and customer acquisition. • Management plans to move successful AI proof-of-concept projects into production over the next two quarters. • Management expects AI deployment to improve collections efficiency, document processing, policy support, recruitment and early-warning capabilities. • Management did not provide quantified cost-saving or revenue targets from AI implementation. • Management expects operating leverage to improve as investments in distribution and affordable housing infrastructure translate into higher business volumes. • Management is evaluating fee-income, loan pricing and business-mix responses to potential changes in insurance commission regulations. • Management indicated that the final impact of insurance commission changes remains uncertain and depends on the regulatory outcome. • Q2 FY27 total loan book increased approximately 19% YoY to ₹95,079 Cr, reflecting strong retail lending growth. • Retail loan book increased approximately 19% YoY to ₹94,391 Cr, accounting for the majority of total lending assets. • Q2 total disbursements increased approximately 60% YoY to ₹9,609 Cr, establishing a new operating benchmark. • Retail disbursements increased approximately 54% YoY to ₹9,250 Cr, supported by strong demand across housing finance segments. • Prime housing finance disbursements increased 44% YoY to ₹4,380 Cr. • Emerging-market disbursements increased 36% YoY to ₹2,882 Cr, reflecting continued expansion in the segment. • Affordable housing disbursements increased 40% YoY to ₹1,149 Cr, indicating a strong recovery in origination momentum. • Corporate disbursements stood at approximately ₹360 Cr, compared with ₹215 Cr in Q1 FY27. • Approximately 60% of prime disbursements came from self-employed borrowers, while salaried customers contributed around 40%. • Affordable housing and emerging-market loan books recorded approximately 45% and 22% YoY growth, respectively. • Approximately ₹241 Cr of affordable housing loans were sourced through selected prime and emerging-market branches during H1 FY27. • Q2 net interest income increased approximately 15% YoY, although the supplied summary does not provide an absolute NII figure. • Pre-provision operating profit increased approximately 16% YoY to ₹749 Cr, supported by loan-book growth and operating performance. • Q2 profit after tax stood at ₹617 Cr, with the CFO reporting approximately 66% YoY growth. • The supplied transcript contains a PAT growth discrepancy, with the CEO mentioning 6% YoY and the CFO mentioning 66% YoY; the correct growth rate requires verification against official results. • Reported Q2 return on assets stood at 2.53%, while return on equity stood at approximately 12.33%. • Reported net interest margin improved 17 basis points QoQ to 3.67%. • Adjusted NIM excluding one-off income stood at approximately 3.49%, providing a clearer indication of underlying profitability. • Reported portfolio yield stood at 9.74%, compared with an adjusted yield of 9.56% excluding one-off income. • Reported lending spread improved to 2.43%, while the adjusted spread stood at approximately 2.24%. • Management indicated that overdue interest and charges collected from a legacy corporate loan account temporarily increased reported yields, spreads and NIM. • Average borrowing cost declined approximately 5 basis points sequentially to 7.31%. • Incremental borrowing cost improved approximately 15 basis points sequentially to 7.26%, while incremental portfolio yield stood at 9.64%. • Gross NPA improved to 0.91% from 0.95% in Q1 FY27, reflecting continued healthy asset quality. • Reported credit cost stood at approximately negative 19 basis points, supported by recoveries from previously written-off loans. • Written-off loan recoveries totaled approximately ₹75 Cr during the quarter. • The retail written-off recovery pool stood at approximately ₹320 Cr, providing potential future recovery opportunities. • Approximately ₹650 Cr remained associated with two legacy corporate fraud-classified accounts under recovery proceedings. • Management cautioned that recovery-assisted negative credit costs should not be treated as a sustainable recurring level. • An analyst highlighted an increase in 30-plus-day delinquency for a 24-month vintage cohort from approximately 0.2% to 0.4%. • Management attributed part of the early-stage delinquency movement to portfolio seasoning and indicated that 90-plus-day delinquency remained stable. • The corporate loan book stood at approximately ₹689 Cr at September 2026-end. • H1 FY27 portfolio buyouts totaled approximately ₹986 Cr, including around ₹838 Cr during Q2. • The company received AAA ratings with stable outlooks from CRISIL, ICRA, CARE and India Ratings, strengthening its funding profile. • The company reported a distribution network of 404 branches, supporting nationwide retail and affordable housing expansion. • The disclosed branch categories included 234 affordable, 88 emerging-market and 81 prime branches, totaling 403; the one-branch difference remains unreconciled in the supplied summary. • Under PMAY Urban 2.0, the company facilitated benefits for more than 8,000 beneficiaries and submitted approximately 1,200 additional applications for approval. • The company launched PMAY nodal branches in Siliguri and Kanpur to support housing scheme awareness and customer outreach. • AI initiatives included voice-based collections, intelligent document processing, policy assistance, recruitment automation and machine-learning-based early-warning tools. • Operating expenses increased approximately 20% YoY to ₹260 Cr, reflecting ongoing investments in business expansion. • Operating expenses to average total assets stood at approximately 1.03%. • The company recognized approximately ₹7 Cr of one-off GST expense relating to a prior-year royalty payment to PNB. • Capital adequacy ratio stood at approximately 27.03%, with Tier 1 capital adequacy of 26.62%. • Net worth stood at approximately ₹20,250 Cr, while book value per share was approximately ₹776. • Key risks include rising borrowing costs, competitive lending rates, normalization of one-off income, recovery-assisted credit costs and higher operating expenses. • Additional risks include construction-finance expansion, early-stage delinquency trends, potential insurance commission regulation and execution of portfolio buyouts and sell-downs. • Overall outlook remains positive, supported by 18–20% FY27 loan-book growth guidance, normalized ROA guidance of approximately 2.4%, strong retail disbursements, improving funding costs and healthy asset quality. • Key Q3 and Q4 FY27 monitorables include sustained loan-book growth, adjusted NIM improvement beyond 3.49%, affordable and emerging-market portfolio expansion toward 45%, normalized credit costs of 10–12 basis points and implementation of lending-rate revisions. • The supplied earnings-call material is machine-transcribed and contains some inconsistent figures; reported management expectations and financial metrics should be verified against official disclosures before investment decisions.

PNB HOUSING FIN LTD.

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