PNB Housing Finance Shares See 78% Upside Potential, Says Goldman Sachs

The recent fall in PNB Housing Finance shares has caught the attention of investors and analysts alike. Shares of the company have declined by 28% over the past nine trading sessions, with eight of those sessions seeing a decline. The stock took a significant hit on Friday, August 1, when it dropped over 18% following the resignation of MD & CEO Girish Kousgi, citing personal reasons.

Goldman Sachs, a prominent brokerage firm, has released a note maintaining its 'buy' recommendation on PNB Housing Finance. The firm has set a price target of ₹1,386, which implies a potential upside of 78% from Monday's closing levels. According to Goldman Sachs, the recent decline in PNB Housing Finance's stock price presents an attractive entry point for investors.

The brokerage firm believes that despite the exit of its MD & CEO, PNB Housing's profitability remains intact. This, combined with the recent fall in stock price, suggests that valuations have likely bottomed out. Goldman Sachs also views the recent decline as 'overdone' and emphasizes that it creates an attractive buying opportunity.

In its analysis, Goldman Sachs highlights several factors that support its bullish stance on PNB Housing Finance: - Stable asset quality - Expansion in lending spreads despite intensifying competition - Disbursements growth in the affordable and emerging markets business

The firm projects that PNB Housing Finance is well-positioned to deliver an earnings Compounded Annual Growth Rate (CAGR) of 15% over the financial years 2025-2028. For the near-term, investors will be closely monitoring the company's quarterly earnings and the appointment of a new MD & CEO.

As of Monday, shares of PNB Housing Finance closed 3.5% lower at ₹779.9. The stock has fallen by 30% over the past month. Despite the recent turbulence, Goldman Sachs remains confident in the company's long-term prospects and maintains its 'buy' recommendation.