Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
PNB Housing Finance Ltd (NSE: PNBHOUSING) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Chaitanya Yadav — National Head Corporate Planning and Investor Relations
Ajay Kumar Shukla — Managing Director and Chief Executive Officer
Vinay Gupta — Chief Financial Officer
Valli Sekar — Chief Business Officer Affordable Business
Analysts:
Unidentified Participant
Abhijit Tibrewal — Analyst
Unidentified Participant
Viral Shah — Analyst
Kunal Shah — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Harshit Toshniwal — Analyst
Presentation:
Operator
Ladies and gentlemen, good morning and welcome to the PNB Housing Finance Limited Q3 and 9M FY26 earnings conference call. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr.
Chaitanya Yadav, National Head Corporate Planning and Investor Relations for opening remarks. Thank you. And over to you.
Chaitanya Yadav — National Head Corporate Planning and Investor Relations
Thank you. Rhian Good morning and welcome everyone. We are here to discuss PNB Housing Finance Q3 and 9 month financial year 2526 results. You must have seen our business and financial numbers in the presentation and the press release shared with the Indian stock exchanges and are also available on our website. With me we have our management team led by Mr. Ajay Kumar Shukla, Managing Director and CEO of the company. We will begin this call with the performance update by the management team followed by an interactive Q and A session.
Please note that this call may contain forward looking statements which which exemplify our judgment and future expectations concerning the development of our business. These forward looking statements involve risks and uncertainties that may cause actual developments and results to differ materially from our expectations. PNP Housing Finance undertakes no obligation to publicly revise any forward looking statement to reflect future events or circumstances. A detailed disclaimer is on slide 44 of the Investor presentation.
With that I will now hand over the call to our MD and CEO Mr. Ajay Kumar Shukla. Over to you sir.
Ajay Kumar Shukla — Managing Director and Chief Executive Officer
Good morning everyone. I am pleased to present our quarter three and nine month financial 26 performance. Let me give you some industry update and guidance. This quarter the RBI announced an additional 25 basis point reduction in the repo rate bringing it down to 5.25% with immediate effect. With this step the RBI has delivered a cumulative 125 basis point cut in 2025 marking one of the most meaningful easing cycles in recent years. This latest policy action is a clear positive for the real estate sector as we close out the year.
It builds on the earlier rate reductions and further strengthens home buying affordability. Particularly in the affordable and mid segments. The customers are more sensitive to interest rate movements. The decline in EMIS is expected to draw sensitivities back into the market supporting sustained demand momentum. With housing prices across the top seven cities rising by around 10 to 15% over 2025. The rate cut acts as an important cushion to preserve affordability. It offsets part of the price appreciation witnessed during the year and ensures that home ownership remains accessible to a wide base of buyers.
Overall, the combination of softer borrowing cost, resilient buyer sentiment and stable economic fundamentals positions the housing market on a strong footing as we move in 2026. Let me talk about the performance of the PNB Housing Finance Ltd. The retail loan book grew by 16% to 81,931 crore as on 31st December 2025. The total loan book of the company stood at 82,232 crore as on 31st December 2025. The affordable and emerging market segments now accounts for almost 39% of the retail loan book with continued focus on collections.
Our credit cost for quarter three. 26 remains at minus 19bps. The gross NPA stood at 1.04% as on 31 December 2025. The affordable portfolio continues to season we have witnessed some upstream delinquencies, an unexpected trend at this stage of the business cycle. Importantly, delinquency level remains well within industry benchmark for the affordable housing segment. We remain deeply focused on maintaining portfolio discipline and continue to work forward achieving our long stated target of 1 to 1.1%.
NPA NIM remains stable at 3.63% during the quarter, achieved ROI of 2.57% for nine months financial year 26 on an annualized basis. Let me now talk about in more detail on the performance achieved during the quarter as far as disbursement is concerned. During the quarter overall segment disbursement grew by 16% yoyo reaching 6,217 crore. Within this the affordable segment saw a 15% yu wide drop and 4.5% quarter on quarter decline in disbursement driven by our strategic decision to recalibrate affordable business in few challenging geographies due to government ordinance.
However, the emerging market segment continued to outperform delivering a strong 25% YoY growth and disbursement. As this impacted pocket stabilize, we expect affordable disbursement to revert back to growth trajectory of Q4 financial year 26. The prime segment delivered 20% YUI growth despite the broader pressure on yields following the rate cuts. Looking ahead, our strategic priorities remain unchanged. We will continue to reinforce our focus on scaling the affordable and emerging market segment given their strong underlying demand and long term growth potential.
Also, we are going to start construction finance business in calibrated way in tier 1 cities. Apart from that we are also going to start emerging developer finance with average ticket size up to 25 to 30 crore range in selected cities to improve our yield and NIM. As far as loan book is concerned, the retail loan book grew by 16% YoY as on 31 December 2025. The loan book for emerging markets and Affordable segment grew 31% YoY reinforcing our commitment and focus on these segments. As stated earlier, the company continues to focus on growth in emerging and affordable segments which contribute 39% of retail book.
The corporate book now stands at 272 crore as on 31st December 2025 the total loan book stood at 82,203 crore and asset under management is at 86,048 crore. The total live accounts serviced by the company crossed 3.6 lakhs. As far as geographical presence is concerned, the total Pan India branch network of the company is 355 with the affordable and emerging market segment accounting for 79% of total branch network. Our expanding footprint in Tier 2 and Tier 3 cities positions us well to capture increasing demand in these markets aligned with our long term growth ambitions.
We expect to add 40 to 50 new branches annually to deepen our presence in tier 2 and tier 3 cities. If I talk about asset quality, the gross NPA improved to 1.04% as on 31st December 2025 as compared to 1.19% on 31st December 2024 and 1.04% as on 30th September 2025. During the quarter we recovered 49 crore from retail and corporate segment. The company has a remaining return of pool of around 650 crore incorporated and around 350 crore in retail. As far as borrowing bids is concerned, our cost of borrowing improved by 19 bids sequentially to 7.50% in Q3 driven by ongoing negotiations with banks and the impact of repo rate cuts.
As far as margin is concerned, NIM remains in line with our guidance level at 3.63% for the quarter versus 3.67% in quarter two financial year 26. Profitability return on asset stood at 2.57% annualized in nine month financial year 26 as compared to 2.48% in nine month financial year 25. Our ROE is at 12.31% annualized at nine months financial year 26. Let me reiterate that we will continue the guidance of retail group growth in the range of 17 to 18% with higher focus on emerging and affordable segment.
With this I would like to hand over the call back to Chaitanya. Thank you so much. Yeah,
Chaitanya Yadav — National Head Corporate Planning and Investor Relations
Thank you sir. I will now request Vinay, our CFO to talk about the financial numbers.
Vinay Gupta — Chief Financial Officer
Thank you Chaitanya and a very good morning to everyone. I am pleased to walk you through. Our financial results for the quarter ended 31st December 2025. As you have already heard, our total loan book for as of 31st December stood at at 82,200 crores growing 14% year on year. Our retail loan book grew 16% reaching to INR 81,930 crores. Affordable and emerging market segments grew 31% year on year put together and now constitute around 39% of our overall retail loan book. Let me start with an overview of our financial performance this quarter.
Our Yield declined to 9.72 versus 9.95 in Q2FY26. This is driven by reduction in corporate book. As we mentioned at the end of previous quarter there was one large corporate account which got foreclosed so that led to a reduction in our mix of corporate book and impacted 10bps on my yield. We covered it largely through reduction in cost of borrowing but there is still some marginal impact which was left out on the nim. Also. The impact was there due to lower disbursement yields and higher runoffs.
At the same time our cost of borrowings improved by 19bps sequentially to 7.5 in Q3 driven by ongoing negotiation with banks and the impact of repo rate cuts. The incremental cost of borrowing improved to 7.2% in Q3 as compared to 7.42 in the previous quarter. Our net interest income during the quarter was INR 772 crores which is a growth of around 11% year on year. NIM as I mentioned is at 3.63 compared to 3.67 in Q2 FY26. Our operating expenses grew 16.7% and 10.5% quarter on quarter to 240 crores versus 217 crores in Q2.
This increase includes one time expense of 6 crores on account of implementation of new labor codes. Plus there is a timing difference in ESOP. There was a release last quarter on account of exit of previous MD and now the cost is normalized so this cost looks a bit of an aberration. Overall our OPEX to ETF for Q3 is 1.09%. We continue to maintain our OPEX 280 guidance of being raised bound between 1 to 1.1%. Our pre provision operating profit has grown 8.4% and ex1OFFs it has grown 10% year on year.
Credit cost continues to be Benign. It is 19 bips negative. As MD sir also clarified. We recovered around 49 crore from return of pool during the quarter. Stood at 520 up 7 7.7% year on year. ROA improved by 9 bips on a year. On year basis at 2.57 in 9 months. FY26 ROE is at 12.3. And our overall CR stands at 29.61 with tier 1 capital at 29.06. Our debt to equity is now 3.63. And our book value stands at 710 rupees. With this I now hand it over back to Chaitanya for taking the call forward. Thank you.
Vinay Rehan. We can now open the call for the Q and A please.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may Press Star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen,
Unidentified Participant
If you wish to ask a question please press star and 1. You can take the first question.
Operator
We take the first question from the line of Abhijit Debrawal from Motilal Oswal Financial Services limited. Please go ahead.
Abhijit Tibrewal
Yeah. Good morning sir and thank you for taking my question. First of all, congratulations to Sir Ajay Shukla on assuming the role of MBCU at PNP Housing. Sir, first question on the affordable book you have called out in the presentation and in your opening remarks as well that you have restricted ticket sizes in certain geographies. So just trying to understand which geographies are this right? And what are the underlying reasons for restricting ticket sizes. If you could just help us understand that.
Ajay Kumar Shukla
Thank you Abhijit. As far as affordable book is concerned we saw some challenges in especially in some part of southern market. It was not all across India. So we recalibrated our strategy in those markets. This was primarily because of some government ordinance and that is already. That phase is already out. I think we will rework and we will come back again on the new method of defining our affordable strategy for the southern market.
Abhijit Tibrewal
Got this ordinance that you’re talking about is. Is it the MFI ordinance that came last year almost a year Back.
Ajay Kumar Shukla
Yeah, it was, it was that. But it impacted the affordable business also. Because when you know any information comes to the market it impact the other segments also.
Abhijit Tibrewal
Got it. And these are not geographies or customers which have got impacted by. By tariffs or anything. Right.
Ajay Kumar Shukla
So there was some partial impact on geography also. So for example you know Tamil Nadu, we saw some challenge. Challenge because of, you know that we decided to reevaluate our strategy in 30 and market. And since the market is you know again stabilized and government ordinance is also now, you know stabilized now I think we will be focusing again on those markets.
Abhijit Tibrewal
Got it. So the second question I had was, I mean late last night you declared a corporate account as a fraud account despite you having called out that you’ve written off this account back in FY23. So just trying to understand, I mean this, this come up during any of your RBI or NHV inspections. And a related question here is, I mean while you’ve been around here for a little over a month now have you had a chance to take stock of the loan book? Basically how is the quality and would you need to take any higher provisioning on the book in the coming quarters?
Ajay Kumar Shukla
So as far as this, you know the fraud which we reported, as you rightly said that we already written off this account in 2022 23. And there is no material adverse effect on financial of the company. And we are currently undertaking appropriate legal measures in this case. The amount sanctioned was 2.75 crore. And we reported 2.37
Unidentified Participant
275
Ajay Kumar Shukla
Crores. And the current outstanding is 237 crore around. And since it was already provisioned so no financial impact, you know, I don’t think, you know, on the
Vinay Gupta
Asset quality. Front, Abhijit, we don’t foresee any increase in any of the segments. We are adequately provisioned across all the stages and that may continue.
Abhijit Tibrewal
Dr. 10 sir, I mean then, I mean declaring this account as a fraud. Now was there some technical reason behind it?
Vinay Gupta
Yeah, it was basically due to some recent developments which have happened in that particular account. And hence as per the process, after following the due process, you know of giving principles of natural justice we have then decided to declare it as a fraud.
Abhijit Tibrewal
Okay. And so then the last question I had was, I mean have you made any PLR changes in the last quarter or any changes effective January this year?
Unidentified Participant
No, not yet. No.
Abhijit Tibrewal
This is all from my side. Maybe I’ll come back in the question. Thank you. And I wish you and your team the very best.
Operator
Thank you. We Take the next question from the line of Viral Shah from IIFL Capital. Please go ahead.
Viral Shah
Hi. Thanks for the opportunity and congratulations Ajay on the new role. It has been now one month since you joined nbhs. I just wanted to understand see from your perspective, first of all what is it that you are finding it say different versus your expectations when you are joining. And secondly more importantly if there is any change or an update to the strategy of say growing the share of affordable emerging, any say anything within say underwriting or the collection practices where you think you can make it more robust, any of those things, what are, what.
Will be your views on this thing?
Ajay Kumar Shukla
Thank you. Viral. You know, I think you know, last 30 days what I observed that we are on the almost similar kind of path which you know, any other housing finance company works. And as already said I and I reiterated that we’ll continue the guidance which has already been given in the market. We’ll focus on our emerging and affordable business. So there will not be much change in the strategy of the organization will continue and will further improve and explore the opportunities where we can get the better yield.
And Nim, I don’t see any challenges as Vinay also confirmed that on the quality of portfolio because even in affordable also we are much better than any affordable company, you know, in this industry. So I don’t see there is any change as far as the quality and. All those things
Unidentified Participant
And just as part of this only. So
Viral Shah
I think earlier guidance with regards to say the share of affordable and emerging mix stated number was 40% and then I think couple of quarters back there was some reclassification emerging and we had kind of highlighted that we can that percentage now can look higher. Do you want to give any percentage target over a medium term?
Ajay Kumar Shukla
Yeah. So we had, we currently we are 39% and we are expecting this to grow by 45 to 50% in the range of 45 to 50%
Viral Shah
As a share. Right. The emerging and affordable.
Ajay Kumar Shukla
Emerging and affordable. Yeah, put together.
Viral Shah
Got it. And just on the question that I asked, sorry if I am repeating but with regards to the underwriting practices or collection practices, you don’t anticipate any change. Because of which there can be any. Disruption to our growth or anything.
Ajay Kumar Shukla
No, I don’t see that there will be any, you know, deception because I think things are going very well as far as underwriting and collection both.
Viral Shah
Got it. And my second question Vinay was to you how soon can we get to see or converge our overall cost of funds to now the incremental cost of funds of 7.2% and what would be our say medium term now named trajectory guidance. If you could help us with that.
Vinay Gupta
So this NIM as of now due to pressure on account of runoff and the new disbursements, yields already running lower than our portfolio yields. So that pressure is going to continue. We are offsetting it with the reduction in cost of borrowing. So we continue to maintain the guidance of NIM between 3.6 to 3.7 post Q4 we will recalibrate looking at, you know, once the stability happens on repo, how it is going to play out in the next year and once we launch cf, once we launch this developer finance, I think these will obviously add on to our overall yield profile.
So next year probably we might see, you know, some expansion once the new segments start delivering.
Viral Shah
Got it. I think this was my question from my end. Thank you so much and all the very best.
Vinay Gupta
Thank you. Thank you.
Operator
Thank you. We take the next question from the line of Kunal Shah from Citigroup. Please go ahead.
Kunal Shah
Continuing on the question with respect to say the. Under the new management just wanted to understand any key priorities that would be there or maybe it’s the business as usual. Any. Any key priorities from your end. And in terms of the ROA, we are still guiding for 3.6 to 3.7% ROA. We still have the benefit of CD recoveries which is there. So maybe in terms of taking the roas up and what would be the aspirational ROA target over next three odd years.
Ajay Kumar Shukla
So thank you Kunal. So let me. You know, slightly correct here that I think the. You’re talking about, you know, NIM or you’re talking about roa.
Kunal Shah
No, no. So I was saying like margins, we are guiding for 3.6 to 3.7% margins. Okay. And we still have the benefit of the recoveries which would eventually go away over the medium term. So then maybe in that scenario of steady margins and maybe some normalization of credit cost, how do we see the roas panning out over two to three years?
Ajay Kumar Shukla
I think this will be in the range of 2.5 to 2.6%. ROI will remain stable at the rate of 2.5 to 2. 6%. If I tell you that 9 month financial 26, my RO is 2.57% as of now and which will be in the range of 2.5 to 2.6, 2.65 only or will be in that range only.
Vinay Gupta
Just to add on Kunal, there are three levers as MD S has Also mentioned we are starting cf so that will definitely support us on the nim. Secondly, we are also starting a small developer finance which is also going to be a new vertical where average ticket size will range between 25 to 30 and yields will be in the range of 11 to 12%. So that will also be NIM accretive. And on cost of borrowing again we have few levers. Like you know, if the rating upgrade happens in a quarter or two that will also lead to substantial benefits on our cost of borrowing.
So these factors apart from shift that we are making towards emerging and affordable, it will be somewhere around 50%, let’s say by end of next year. So by then, by then we would have some benefit. And after that these things will definitely support the current NIM profile. Actually it will help in improving the NIM profile.
Kunal Shah
Yeah. And in terms of this small developer and cf we had gone through that cycle and we had run down this entire portfolio. So maybe learning from the past experiences, any, any differences in the business model that we would now incrementally cater to and how much would it scale up to? Maybe is there any cap in terms of the proportion we would want to or maybe can it get towards like 3,5% of the AUM over a 3 year period or. No, we’ll not be so aggressive.
Ajay Kumar Shukla
Yeah. So Kunal, I think you know what we have planned is that we will be having almost 8 to 10% of my total book as our exposure in construction finance and emerging developer portfolio. Any given point of time it would be in the range of 8 to 10% only. That’s the maximum exposure. Exposure we want to keep. That restaurant will remain the retail business as well as as far as policy is concerned. So emerging developer and the construction, construction finance both will have a separate policy. Okay.
There will be difference between both the policies because where the emerging developer financing will end, the, you know, construction finance will start. So we are in the process of designing emerging developer policy. The construction policy is already in place and you know that’s how we have started, you know, sourcing business also. But soon you will see the disbursement will start in Q4 or maybe first quarter of Q1.
Kunal Shah
Sure. And one last question, if I can squeeze in, that’s with respect to affordable again. So you are maybe when you mentioned like you have recalibrated the growth in some geographies and ticket size cap in select geographies. Overall when we look at it it’s like still the ticket size of more than 15 lakhs is something which is coming up, which is coming down actually. So is that maybe in terms of the ticket size capping or this is something similar to what you indicated, challenges in market. And even in terms of the repayment rates in affordable housing, when we look at it with the disbursements which have been there of 786 crores, we are still seeing almost 600 crores of accretion.
So there’s hardly been any rundown which has been there in that portfolio. So maybe what could be the reason for that? So the repayment prepayment run rate still appears to be quite low in the affordable housing. Yeah. And where should we aim this segment to grow say over next 12 months in terms of the growth ratios?
Valli Sekar
Yeah, hi, this is Valli Sekhar. See, regarding this, you know, disbursement which you are asking about in Q4, the ticket size will slightly go down because now there is a slighter concentration towards the PMI as well. So the ticket size from the last year has slightly come down also. And this recalibration is particularly in the southern markets, as you all are aware that Tamil Nadu used to be our number one contributor in terms of the business. So when we faced that, you know, ordinance issue in the first quarter end first quarter, by second quarter we had recalibrated certain policies in certain branches and on the ticket chase also.
So the effect has come as a spiral effect on the quarter three. But now in quarter three since the ordinance, you know, has been retaken back now the now we have again come back with the policies and by Q4 we will be coming back again as usual in, in those markets. And the, the guidance remains the same. We’ll be growing quarter on quarter in the, in the, you know, in 25% to 30% is the level of growth which we are expecting. And. Yeah,
Kunal Shah
Okay. Yeah, that’s helpful. Yeah, thank you. Thank you. And all the best. Yeah,
Valli Sekar
Thank you. Thank you.
Operator
Thank you. We take the next question from the line of Nischen Javade from Kotak. Please go ahead.
Unidentified Participant
Most of my questions have been answered, you know, just a small one on, you know, competition, you know, on the affordable side, you have kept, you know, the incremental rates are stable sequentially. Do you see competition in the sector and do you see these rates going down? And likewise in the prime side, given the fact that we are probably towards the fag end of rate cuts, do you see the intensity of competition to reduce?
Ajay Kumar Shukla
So Nishant, I think the competition is all across in this industry. So I think it’s a Very competitive industry in affordable also there is enough and good competition as we see in prime business. But just that competition is there. There would not be much impact on the pricing because the range wherein we are operating is already very competitive pricing in the market. So I don’t see there would be much more price drop in the market especially in affordable segment. I think this will remain as it is.
And as far as prime is concerned, prime there is definitely is. You know, because of recent repo red cut there is a challenge in the market from nationalized banks and the private sector banks. But we have segmentized ourselves in a very different way. So close to, you know, 45% of my portfolio is self employed and 55% sale rate. So we get better, you know, margin in self employment. That is why we are able to maintain a margin. And Nim.
Unidentified Participant
Have you called out a difference in rates between salaried and self employed?
Ajay Kumar Shukla
So. So yes there is a risk based rising. So we always use risk based pricing. So salary always are softer than, you know, self employed.
Unidentified Participant
Got it and got it. And you know, you are increasing the share of construction finance and emerging developers, you know, sort of technically increasing the risk profile of the company to some extent. You know, in this backdrop, you know, do we really see, you know, a rating upgrade, you know, given the fact that the risk is actually will incrementally be slightly higher.
Ajay Kumar Shukla
So yes, but definitely the construction finance business is always a riskier business in the market. But I think the kind of policy and the underwriting standard we are going to certain we have set, I think, you know, they will be sailed through, you know, easily.
Vinay Gupta
Also there is a cap on the overall growth. We are not going to grow very aggressively here. It will remain, you know, range bound between 5 to 7%, you know, in the next two to three years. So it will not grow so aggressively and large part is still retail. So that is not going to be a challenge.
Unidentified Participant
And you’re expecting an upgrade probably in next one or two quarters.
Vinay Gupta
Yes, I mean we are hoping for it.
Unidentified Participant
Sure, sure. Thank you very much and all the best. Thank you. Thank you.
Operator
Thank you. We take the next question from the line of Nadesh from investech. Please go ahead.
Unidentified Participant
Thanks for the opportunity and good morning. So first question is on yield. There is a 25 basis point decline in yields in this quarter. So if I look at the share of corporate that has slightly gone up and I think share of emerging plus affordable has also been gone up, going up. So what explains the sharp drop in yield? Have we taken a price reduction on our back book because I see incremental yields are also broadly stable. So what is driving this sharp yield reduction and how you see yields going forward?
Vinay Gupta
Yeah, see nidesh, as I mentioned out of this 25 or 23 bips. 10 bips is on account of one large corporate account which got foreclosed at the end of previous quarter. So since the book mix between retail and corporate has gone down and that was a large account of around 340 crores or so that got foreclosed. So that has impacted my yield mix for this particular quarter specifically by 10bps. Rest 12 to 15bps is on account of, you know, disbursement yield being lower than the book yield and you know, the higher runoff pressure, you know which entire industry is going through on the prime and emerging segment.
Unidentified Participant
And how do you see yields going forward? Going forward we should see.
Vinay Gupta
So this 10 bips obviously is one off this this quarter. Unless we see more runoff happening on the corporate side, this should not impact again then next 10 to 12 bips is something which will remain. And that is what we need. We are trying to offset through the reduction in cost of borrowing.
Unidentified Participant
Sure. And secondly, the runoff rate has also increased. You also mentioned that. But if I look at the calculated repayment rate was around 15% till Q1 and it has now increased to almost 19% in this quarter. So, so this how much is balance transfer out of it and how do you see what we are doing to arrest this?
Vinay Gupta
So as you rightly mentioned, yes, it has gone up from 1516 to around 19. And large part of this is on account of btouts. The increase is actually on account of btouts. And this is true because of the current rate cycle we are trying to manage. But I think it will remain somewhere around 18 to 19% till the rate stabilizes.
Ajay Kumar Shukla
So till till quarter one, you know, the BT in was higher than the BT out. After the softening of rate of, you know, and reported cut by the rbi, the trend of BT in has changed. So if I talk about, you know, this quarter earlier, the story was, you know, whatever was the bid in approximately same was the btout. But now there is a difference between BD in and BT out of almost 2%. You know, month on month. Quarter three there was a difference of almost, almost 2% because the rates have softened. So, you know, customers are looking for better prospects or maybe where they can get a better rate.
So this challenge is not with us. I think this is the industry challenge which industry is facing. Whenever there is a sharp Rate cut, you will see this trend.
Unidentified Participant
Sure. And then lastly if you can also speak about the yields in the corporate in the construction finance book. So on the emerging developer you mentioned yield of around 11%. What will be the yield in the construction finance book of ticket size of more than 30 crores.
Ajay Kumar Shukla
So yield I think you know it would be in the range of around, you know you can safely say between 12 to 12.5%. That would be the range in construction finance.
Unidentified Participant
Because in the emerging segment you mentioned the yield of 11%. So I thought the emerging it will. Start from
Ajay Kumar Shukla
11% because he, this emerging developer will have a combination of cities like dairy and all those. So the, the prime, the super prime developer of this segment will definitely look for a better yield. So it will start from 11 but it will go up to 13 and 14% also. So overall we’ll maintain in the range of you know 12.5 to 12.7, 75%. So largely the corridor would be between 12 to 12.25%.
Unidentified Participant
Sure. Thank you sir. That’s it from my side.
Ajay Kumar Shukla
Thank you. Thank you.
Operator
Thank you. We take the next question from the line of Bunty Chawla from Ask Investment managers. Please go ahead.
Unidentified Participant
Thank you sir. Thank you for giving the opportunity. Firstly on this as you said that you have recorded the frauds which is in already written up. So any internal implications or any steps needs to be taken internally in the system because of this. If you can highlight on that.
Ajay Kumar Shukla
No, I don’t think you know there is a thank you buddy for first of all for question I don’t think there is any internal implication because there’s a process which have to be followed. So we followed the process and already legal measures are going on. So I don’t think there is any internal implication of this.
Unidentified Participant
Okay, that was very helpful sir. And secondly as you mentioned that you will be able to sustain the 17% growth for retail segment for this year also. So that gives a. If you see the Q4 number in terms of disbursement slightly higher on a sequential basis like 45, 50%. Is it possible after you have you already said that we are now moving to normalization in terms of affordable. So this gives a large task in terms of disbursement in Q4.
Ajay Kumar Shukla
Yeah. So so always in the industry the Q4 disbursement is always high. So currently on yui basis we are at 16%. So 18% should not be a challenge because that’s how the, you know historically you see the data talks about. So I think we’ll be able to achieve those numbers.
Unidentified Participant
Okay. And sir, lastly you said we will be able to maintain the margin 3.6 to 3.7 along with the stability in ROE of 2.5 to 2.6%. But as we see currently we are in the end of cycle of the negative provisioning next year it should be normalization of credit cards and all. So what drives you to the confidence of ROA remaining stable at this level?
Ajay Kumar Shukla
So there are two aspects of this. First of all I think we have a pool there in at least in 4 to 5 quarter we will have a recovery from our right of pool. So that’s the first confidence. The second confidence is that once we will improve over this affordable business and emerging business from the label of 39 to 45 to 60, 50% that will give us better yield as well as since we are going to start our corporate construction finance and the emerging developer finance that will also give us edge to maintain the higher business volume and the higher yield.
So this will maybe if at all we don’t get much, you know, relief from after 5, 4 to 5, 6 quarter then I think by the time this business will build and will compensate for from the scale of business and the margin.
Unidentified Participant
Oh okay. So you are saying that the recovery will continue still for next four to five quarters. So on that basis what should be the normalized credit cost for FY27?
Ajay Kumar Shukla
So FY27 I think it would be, we are expecting, you know, if I talk about next year from 27 on, but it would be in the range of 20 to 25 books. You know.
Unidentified Participant
That was very helpful sir. Thank you and congratulations. Thank you.
Operator
Thank you. We take the next question from the line of avinash Singh from MK Global Financial Services Ltd. Please go ahead.
Unidentified Participant
Yeah, good morning. Thanks for the opportunity again a bit kind of continuing on that ROA and NIM question. So I mean currently that NIM is like 3.6, 3.7 that you kind of reaffirmed. And if we were to look at NIM plus fee probably close to 4.1 odd percent now. I mean beyond this 4, 5 quarters where you have this benefit of provision reversal a normalized credit cost probably if it is going to be within a 20 basis point, assuming that, okay, anyway you are going into finance probably basically this is a kind of a reversal of nearly 40 odd basis points in terms of the where credit cost is.
So mathematically speaking to maintain ROA and also with your kind of, you know, growing book, the financial leverage will mathematically work against that. Your name +fee now so when you are looking say for 28 or even beyond two point kind of a current level of ROA basically that requires a NIM fee to go up mathematically by nearly 50 basis point. So I mean of course there are push and pull factors but are you sort of a confident because we have very limited scope in OPEX what I understand and of course credit cost side at like 40 basis point kind of a reversal.
So do you see mathematically speaking that the 50 basis point is pull and pull factors. Taking this let’s put NIM and fee to four and a half odd percent because that will be kind of a required level to deliver this 2.5 to 0.6% ROA. Thanks.
Ajay Kumar Shukla
So. So yeah. So Avinash I think you rightly said that there would be impact of almost 40 to 50 bips to get that kind of ROI. I think we are very pretty much confident that would be able to do it because the kind of yield and the NIM you know we’ll get in my construction finance and my small emerging developer funding I think this will this will help us plus scale up business will also help us because when the business scales up you know the your cost always goes down because it gives you know benefit of your book also.
So I don’t think there will be any challenge on that.
Unidentified Participant
So yes thanks. Also beyond FY26 I mean what is kind of for the now you are going to start sort of a new segment and all so medium term growth guidance or a space and what’s that level?
Ajay Kumar Shukla
So we are working on that. We’ll come back on that. You know so.
Unidentified Participant
Thank you all the way sir.
Ajay Kumar Shukla
Thank you.
Operator
Thank you. We take the next question from the line of Himanshu Taluja from Aditya Birlasan Life AMC Limited. Please go ahead.
Unidentified Participant
Hi sir, thanks for the opportunity. Just couple of questions at my end. Can you just given you in your opening remarks you called out certain with respect to few challenges in the southern market related to the MFI ordinance which triggered some calibration. Is there anything apart from this? Is there any other basically any other challenges with respect to overheating of these geographies because we are seeing various players operating in the southern markets are seeing some slowdown. Can you just call out there is any apart from this and how do you plan to react to this situation?
Second is on the affordable housing we are seeing some of the industrial bureau data which suggests that there is volume softness in the ticket size of up to 25 lakhs for the industry. How do you plan to deliver growth if the industry volumes remains on a muted. If you can just help us, how do you plan to deliver growth in the affordable or can we see some bit of calibration in the growth for next few quarters as well in the affordable housing? Thanks. And then I have one more question.
Valli Sekar
Yeah. Himanshu. Hi. So this as far as this ordinance issue was there, it was an issue that came up in the end of Q1 where the spiral effects continued in Q2. Also in our collections we found some heat coming in the delinquency. Early delinquencies were coming so we immediately took a proactive action. And because that being our biggest contributor of the business numbers, we immediately got into ticket sales and we have already given in one or two of our meetings that we converted the country as tier 1, 2, 3, 4 and we bifurcated the ticket sales as per the tier 3 and tier 4 markets as well.
So now by end of October November the festivities, the ordinance circular has again come from the government and we find the situation normalized. And by end of December we are finding even the collections strategy become becoming normal. So now again we will go back into our original policies because we had, we had completely slowed down there. Now we will go back, go back and come back to the original policy. A and secondly regarding up to 25 lakh cases I would have slightly deviated, you know, statement on this because with PMAY coming in all the players are getting into more into EWS and lag.
So it might be a very temporary slowdown. But I would not say because the PMAY everybody is getting into it because it is until five years the customer cannot leave out of us doing a BT out. It is a very good proposition which has come which is given by the government. So everybody is following that. So taking that in queue the you know we will be in the same level of growth which we were posting in the previous quarters. Yes, we were growing very rapidly in the first two years because we were a startup mode.
But now we will come as per the industry standard to 20 to 25% quarter on quarter growth ongoing. Himanshu.
Unidentified Participant
Yeah, sure. Just the last question. What proportion of the pma? Ya. What proportion of the PMI is in the total disbursement currently? So probably what proportion that will be in terms of the total disbursement TMIy contribution?
Ajay Kumar Shukla
The PMO 2.0 is not see, it is just started. So because the pool is building up now till now, if I, if I see the, the bulbad number it would be the subsidy which we customer have got is around in the range of 7 to 8 crore. The which subsidy has been given. I think there were some challenges and teething trouble in initial days of the when the program was launched. Some technical challenges which have been sorted. Now the process is also smoothened because government had nhbn. Government has taken you know different measure for that and they sorted it out.
Now I think this will scale up and it will move very fast in terms of getting succeeded to the customer. But as of now if you talk about the contribution is very low because the process was slightly cumbersome.
Unidentified Participant
Okay, but can you expect this PMI 2.0 to be the game changer in the next 6 to 9 months? Probably from a post 6 to 12 months basically can it become a game changer in terms of your disbursement volumes?
Ajay Kumar Shukla
Yeah so no it may not be very high game changer I would say but definitely it will be game changer because there are. There is enough push from the government and the national housing bank also to promote this and you know that is how I think this again some meeting is going to happen in few part of country where you know few of the you know further deliberation will happen and I think government focus is clearly on to improve this and because the overall amount which they’ve allocated is substantial to facilitate to the underprivileged customers.
Unidentified Participant
Okay, sure sir just a small if you can just provide even if Valim can provide this data point for the affordable housing how’s the 6 mob and 12 mob port for vintage portfolio for the affordable housing. How these numbers are trend and yeah thanks.
Vinay Gupta
We will get back to you separately. We will get back to you separate.
Unidentified Participant
Sure, sure sure. Thank you.
Vinay Gupta
Yeah
Harshit Toshniwal
Thank you.
Operator
Thank you. We take the next question from the line of Harshit Toshnival from Premji investment. Please go ahead.
Harshit Toshniwal
Hi sir, am I audible?
Ajay Kumar Shukla
Yeah.
Harshit Toshniwal
The question was related to the 10 basis point impact which you mentioned because of the corporate one of the account rundown. When I look at the sir corporate developer loan movement this quarter From I think 319 to 250 crores since we haven’t done any disbursement I think everything that repayments are not very high to the tune of 7080 crores itself. So actually if you can help me tie up that 10 basis point impact on the yield seems too large for our rundown of 70 crore number itself. How should we look at that 10 basis points as and you mentioned that next quarter onwards the reversal will happen for that 10 basis points.
So should we expect that the yields of 9.55 which we have come to normalized number would be 9.72 number. A normalized number would be 9.85 to look at from the next quarter.
Vinay Gupta
Yeah, as you mentioned. So it should not be compared with. You know, this runoff happened at the end of previous quarter. So the runoff happened on 30th of September. So the 30th of September book was already lower by 350. So it has actually run down at the end of Q2. So hence it is not showing in the runoff. But it is. If you see Q2 beginning book and then compare, you will be able to see the difference.
Harshit Toshniwal
Got it? Got it, sir. In that case then my 9.72% reported yield this quarter, shouldn’t this be the normalized base rather than why would the 10 points normalize?
Vinay Gupta
No, no. That’s right. This. I was explaining walk of yield versus previous quarter. So it has impacted negatively versus previous quarter. But this is a new normal now. 9.72 which will continue going forward.
Harshit Toshniwal
Okay. Got it. Got it. Sure, sir. Okay. Okay. Okay. Thank you.
Operator
Thank you. We take the next question from the line of Praful Kumar from Diamond Asia. Please go ahead. Praful, please unmute your line and proceed with your question. Since there is no response, we will move on to the next question which is from the line of Prithviraj Patil from Investec. Please go ahead.
Abhijit Tibrewal
Most of my questions have been answered. I just had one question on the disclosures that were giving so Affordable, prime and emerging. Have we changed any classification there? Because I see that the Q3 FY25 numbers are different from the ones that were reported earlier. I just wanted to know if there’s any classification change there. Thanks.
Ajay Kumar Shukla
So. So there is no change of classification. The classification is as it is the geography. The segment is. There’s a difference of only segment of the geography. So what we were following, we are following still. So there is no classification change that will increase our footprint in emerging and affordable segment.
Abhijit Tibrewal
Okay. Thank you.
Operator
Thank you. We take the next question from the line of Omesh Jain from Kotak Life Insurance. Please go ahead. Umesh, please unmute your line and proceed with your question.
Unidentified Participant
Hi. Sorry. Can you hear me?
Operator
Yes. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Have you answered the reason for no change in the branch edition? If I look at the branch addition in the affordable and emerging market, we have not seen sequential change. While from last couple of quarter there was a very strong healthy Branch expansion. And how should we see this number going forward in Q4 in FY27?
Ajay Kumar Shukla
So umesh, I think you know the practice which we are following is that at the end of last quarter we add new branches. If you see why it has not happened sequentially in three quarter. Because this quarter we’ll add some 35 to 40 branches which will reflect and operational in quarter one of next year.
Unidentified Participant
Sure. And what will be net Branch addition in FY27?
Ajay Kumar Shukla
27? We are expecting 50 branches. Almost.
Unidentified Participant
Oh, 50 branches put together. And what will be the affordable mix? No, so. So
Ajay Kumar Shukla
50 branches. If you are talking about end of 27 it would be around 75 to 80 branches. But because this branches which will come up in quarter four will actually reflect in 27 plus 27 branches will also will be working on that. So the total number of branches put together for this year next year would be around 70 to 80 branches.
Unidentified Participant
Sure. And
Vinay Gupta
Majority would be affordable.
Ajay Kumar Shukla
And majority would be affordable in tier three, Tier four cities.
Unidentified Participant
Thanks.
Operator
Thank you ladies and gentlemen. With that we conclude the question and answer session. I now hand the conference over to the management for their closing comments.
Chaitanya Yadav
Thank you everyone for joining us on the call. If you have any questions unanswered, please feel free to get in touch with Investor Relations. The transcript of this call will be uploaded on our website. That is www.pnbhousing.com. Thank you for your participation. Thank you everyone. Thank you
Operator
On behalf of PNB Housing Finance limited that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.