PNB Housing Finance Ltd (NSE: PNBHOUSING) Q1 2026 Earnings Call dated Jul. 22, 2025
Corporate Participants:
Unidentified Speaker
Girish Kousgi — Managing Director and Chief Executive Officer
Deepika Gupta Padhi — Head of Investor Relations
Vinay Gupta — Chief Financial Officer
Valli Sekar — Chief Sales and Collection Officer
Dilip Vaitheeswaran — Chief Sales Officer
Analysts:
Unidentified Participant
Renish Bhuva — Analyst
Suraj Das — Analyst
Abhishek Jain — Analyst
Abhijit Tibrewal — Analyst
Viral Shah — Analyst
Yash S — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to BNB Housing Finance Limited Q1FY2526 earnings conference call.
As a reminder, all participant lines will be 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 an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Deepika Gupta Padi. Thank you. And over to you Ms. Pardi.
Deepika Gupta Padhi — Head of Investor Relations
Thank you, Renju. Good morning and welcome everyone. We are here to discuss PNB Housing Finance Q1 FY26 results. You must have seen our business and financial numbers in the presentation and the trustees shared with the Indian Stock Exchanges yesterday evening. And it’s also available on our website.
With me we have our management team led by Mr. Girish Kaujgi, our management IFPMTU. We’ll begin this call with the performance update by the management followed by an interactive Q and A session.
Please note this call may contain forward looking statements 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. The NP Housing Finance undertakes no obligation to publicly revise any forward looking statement to reflect future events or circumstances. A detailed disclaimer is on slide 45 of the Investor presentation.
With that I will now hand over the call to Mr. Girish Kaushku. Over to you sir.
Girish Kousgi — Managing Director and Chief Executive Officer
Thank you Pardi. Good morning everyone. Thank you so much for taking your precious time out in the morning. I am pleased to present the quarter one FY26 performance on the industry. This quarter RBI announced another 66 repo cut to 5.5% with immediate effect and reduction in cash reserve ratio of 100 groups hazard in four tranches of conservative each effective from September 2025. This move is timely for the UMB real estate industry and can have deep breaching implications across all stakeholders ranging from the aspiring homeowners to developers and investors. This hectic reduction not only reaffirms the RBI’s commitment to supporting economic recovery but also displays stability and growth particularly for interest sensitive industries like real estate.
Talking about the company’s performance, the retail loan book grew by 18.1% to INR 76,923 crore as on 30 June 25. The total loan book of the company stood at 77,752 crore as on 30 June 25 the affordable and emerging market segment formed 37% of the retail loan growth. Our overall collection remains strong in in quarter one FY26 we had considerable recovery contributing to reversal increase cost of -27 days. The gross NPA as on 30 June is 1.06%. We continue to work towards achieving 1% NPA yield remains stable at 3.72% during the quarter achieved ROE of 2.57% for quarter one on an annualized basis.
Let me now talk about in more detail on the performance achieved during the quarter on disbursement. During the quarter with focus on high yielding business, disbursement in affordable Segment grew by 30% y o y and emerging market segment by 32% y o yes, the dispersion in prime segment has considerably been slowed down to avoid pressure on margins. As a result, the overall retail segment Dispersion grew by 14% yor wide during the quarter to 4,980 crores. We will continue to focus on a strategy to grow affordable and emerging market total Pan India branch network of the company is 356 branches out of 356 200.
This is the quarter the company had reclassified 20 branches from Western region having a potential of giving high leading business. So these were the 20 branches which were in prime segment as per our classification. But these 20 branches had the potential of generating business at a higher yield and therefore these 20 branches have been used to that extent. All the numbers are for Rica so with this the emerging market grants count has increased to 80 rankings. All the numbers the past period have been precasted for like to like comparison with our large land India present we are ready to capitalize the opportunity available in tier 2 and tier 50 we plan to add 40 to 60 franchise.
That is the plan for this year as well. The gross NPA improved to 1.06% as on 30 June 2025 as compared to 1.08% on 31 March 2025 and 1.35% as on. During the quarter we recovered 67 crores from retail and prospect. The company has a remaining written off pool of around 700 crores in corporate and 400 crores in printing on borrowing mix. The reduction in the repo rate resulted in 8 weeks decline in our cost of borrowing to 7.76 in quarter 1 from 7.82% in quarter 4 of FY25 on an incremental basis the cost of foreign declined by 39 days during the quarter resulting we have also reduced our PMP HFR by 10 bits which is applicable from 1st July 2025.
Yield remains stable at 3.74% for the quarter 3.75% in Q4 FY25 for FY26 we expect NIM to be around 3.7% on profitability. Our efforts across paralysis created an improving the profitability return on assets on annualized basis is 2.57% in quarter one. Add some testing 2.5% in FY25. Roe was at 1.39%.
With this I would like to hand over the call back to Deepika.
Deepika Gupta Padhi — Head of Investor Relations
Thank you sir. I’ll now request Vinay our CFO to talk about the financial numbers.
Vinay Gupta — Chief Financial Officer
.Thank you Deepika. Very good morning to everyone. As you would have heard from MB sir and you would have seen from the results. Loan book has grown 16% year on year and retail loan book has grown 18% year on year in line with our guidance driven by the strong performance of Asset book growth. T and L also reflects a similar trend. Let me cover some of the PNL highlights in more detail so you would have seen. Yield for the quarter is 9.99 versus 10.03. With respect to borrowings which decline in reported borrowing cost declined by 8bps to 7.76.
The incremental cost of borrowing declined by 39bps to 7.44% in Q1 as compared to previous quarter. Our net interest income during the quarter was INR 760 crores increase of 17% year on year and 2% quarter on quarter. NIM remains stable at 3.74% in Q1 in comparison to 3.75% last quarter. With the decline in cost of borrowing post rate cuts, we have also reduced our PNV HFR by 10 bits effective from 1st of July 2025. Gross margin now stands at 4.06% versus 4.27% in Q4 and versus 4.03% in Q1FY25. Our operating expenses grew by 12% year on year to INRC 16 crore versus 193 crores in Q1FY25.
The increase in operating expenses is much lower than the increase in retail loan book of 18% driving positive operating leverage for the company. Our OPEX to ETA for Q1 is 1.02%. We continue to maintain our apex to opa guidance of around 1 to 1.1% going ahead, our pre provision operating profit has grown 17% year on year while 632 crore on our overall basis. Credit cost continues to be negative at 27bps for Q1FY26 during the quarter we have recovered 57 crores from the return of fees. Happy to report a pad of 534crores in Q1 which is up 23% year on year.
ROA improved to 2.57 in Q1 from 2.55% during last financial year. ROE stands at 12.4% for T1FY26. With respect to CR it remains healthy at 29.7% out of which tier 1 is 28.96%. Our book value now stands at 670k.
With this , I now hand over back. To Deepika for taking this.
Deepika Gupta Padhi — Head of Investor Relations
Thank you ra I now with K D our Chief Sales Officer for Prime and Emerging Business to give segment performance updates.
Dilip Vaitheeswaran — Chief Sales Officer
Thank you Deepika and good morning friends. Welcome to the call. Appreciate you taking the time out for the quarter gone by. We managed to do well on growth as well as asset quality. Given the scenario of the rate sensitivity in the market after the repo rate drop, we decided that with growth and margins being a priority, we will choose to grow the prime book at a slower pace and focus more on the emerging markets. As you can see, the prime and emerging market book together reached 71,000 crores, a growth of almost 13% YoY on disbursements the disbursements in prime markets grew by 1% whereas the emerging markets business grew by 32% YoY to 1736 crores.
Another margin accretive business is NHL where we did 1350 crores of disbursement for the quarter, a growth of 41% YoY. A few highlights, the share of emerging markets business is growing up consistently in disbursements contributing to 35% in Q1 of FY26 this was 30% last year. Q1 the business in emerging markets is generated at a yield increment or a premium of 35 basis points over the prime business. NHL also stood at 35% of incremental disbursements in Q1FY26 this was 29% last year in the same quarter. Even in the prime markets the NHL mix has gone up to 30% in the first quarter.
So like I said, the focus continues to be growth along with margins and will continue to be in the quarters. To come as well. Keeping this in mind, we had also set up an exclusive NHL team in 10 markets across the country. This is shaping up well, has already started contributing to disbursements and will hopefully contribute 100150 crores of incremental disbursements in the quarter to come. To strengthen our NHL offering, we also launched a fixed rate offering which has also been received well across markets and will help us contribute further.
So to summarize, as we navigate this journey in the coming quarters, we will focus on margin accretive business and rely on our strength across distribution, our strong brand presence, our technology and make sure that the company manages to prioritize all its empiricals, growth, asset quality and margins.
Thank you so much. And back to you.
Deepika Gupta Padhi — Head of Investor Relations
Thank you. I’ll now request Valley, our Chief and Sales Collection Officer for affordable business to update on the segment performance.
Valli Sekar — Chief Sales and Collection Officer
Thank you Deepika Good morning everyone. It’s my distinct pleasure to share with you the progress we have made in our Roshni business over the last quarter. We have concluded first quarter of the financial year with a remarkable loan book of 5744 crore reflecting a phenomenal 143% year on year growth, up from 2,36-month-crores of Q1 of the previous year. And we have also doubled the loan book in one year from 2,361 crores to 5,744 crores in June 2025. Our disbursement performance tells an equally compelling story. In Q1 FY26 we disbursed 765 crores delivering 30% growth over 586 crores in Q1 previous year, demonstrating strong momentum and growing market acceptance.
And our incremental yields have also improved, touching 12.1% this quarter compared to 11.6% last year driven by our focus on high yielding segments and tier 3 and TFO markets. Over the past year we have added 40 branches taking a total footprint to 200 branches across 130 potential districts in 15th day. I’m happy to report these branches have started operational and started to contribute significantly to our business. We have also forayed into three promising new markets namely Punjab, Chandigarh and Northeast with plans to deepen our presence in the coming fiscal. Our Pan India operations are well balanced across three zones, north zone contributing 35% followed by west at 35 again and south of 30%.
The geographical balance ensures resilience and consistency in our growth. Tamil Nadu leads in our AEM followed by Uttar Pradesh, Maharashtra and Madhya Pradesh. Our customer profile continues to evolve. Self employed rose to 41% up from 38% a year ago. Informal segment sourcing grew 30.4% up from 26 last year. Now forming a sizable part of our book. 74% of the portfolio is within the ticket price of 25 lakhs. And 34% of our portfolio remains non holding loans. Importantly our portfolio quality remains strong. Bounce rates are well controlled at 11%. NPAs are impressively as low as just 0.3%.
We are incredibly proud of what we have accomplished. With the momentum and strong foundation we have laid we are confident of closing the financial year with a loan book approaching 9500 crores. Thank you so very much for the continued support and trust.
Over to you Deepika.
Deepika Gupta Padhi — Head of Investor Relations
Thank you. Valid when you can now open for Q and A.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and two Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while requesting queue assembles.
The first question comes from the line of Ranish with ICICI. Please go ahead.
Renish Bhuva
Yeah hi sir. Congratulations. Just two things. One on this statistic ROI from FY27 onwards. So currently sort of we are enjoying provision write back and that is supporting our roa. But once the credit cost normalize to say let’s say 2030 basis point obviously Roe we get infected by almost 50 basis point. You know anything credit cost of 2020 plus the right. So what are the levers do you see which can offset the impact of credit cost normalization going ahead?
Girish Kousgi
Okay, so I think I’ve rightly pointed to you we would have support from recoveries maybe for next five or six months quarter and after that actual freight cost is going to be about 25%. While we have few levers on improving margin which is today at about 3.74 3.75%. So we plan to take NIMS to about 4 to 4.1. So that will offset and we are increasingly trying to include a say of origination from affordable and emerging. And now we are trending within the segment to the high yielding segment. So we will see improvement in affordable business in energy business.
The prime quarter one was little tough because of two reasons one cyclical and the second because of repo cut almost about 100 in about four to five months time. So this may not be the case going forward. So we will also try and see if we can slightly increase Yield in our bindo. And as mentioned earlier this year we have launched a new vertical called Omega property. So these four verticals improvement will help us to improve our margin. And with Rico going down with a large effect, we will also see some benefit on the cost of sales borrowing.
So that would help us to maintain array of 2.5% beyond 27.
Renish Bhuva
Got it. So just a follow up on that. So even as of today, you know, on a stock basis our non N portfolio is, you know, touching 30% 29 as of June. So to what level you would like to expand it mix in terms of NHL and hl. Because then obviously under HSE guidelines there is a limited leeway to the extent we can scale non HL.
Girish Kousgi
I think the leverage is going to be by 2.5 to 3%, not beyond that. But I think the idea is not that. The idea is that we are focusing on markets where within NHL we can try and wait goods profile customer at a slightly better fee. So it is a mix of both. One is slightly increasing in the mix, number two also trying to increase.
Renish Bhuva
Got it. And just the last thing on this asset quality bit on the affordable housing. So obviously the cross NPA has been rising from last three to four quarters and still it is the lowest when compared to peers, even 35 CCD. But the sequential increase, you know, in gross NPA quarter by quarter. How does one should reduce data point? Obviously you know, one thing is that might be coming in, but is there anything else which is sort of driving this higher gross NPA quarter by quarter or it is just easing?
Girish Kousgi
No, actually if you look at quarter one it is cyclical and this is true for all the segments. Not just affordable, even prime and emerging. And this is across the industry. So for us affordable book is behaving very well. If you look at a bounce, which is a starting point, it is still below the industry average. It’s about 11.5%. Right. So if you compare with some of the players, obviously the bounces are in higher. I think northwest of 18 19%. So I think portfolio is behaving well, very much under control. Now. We started this business in Jan.
2023, so now it is almost no more than two and a half years. So the book is maturing. So obviously we will see some delinquencies in 30 plus 60 plus. But I think overall we would always be much lower than the industry average. And overall as an enterprise, as an organization, we want to keep an increase at 1%. And even in Upper Durban we would not. Now I think in the quarters to come we would ensure that INP is getting less than 1%. I think that’s the plan. So we don’t at all because even in quarter one. Even in quarter one a bounce basis, you know.
Renish Bhuva
Yeah, it’s 28 precent.
Girish Kousgi
Absolutely. Yeah.
Renish Bhuva
That’s it from my. Thank you.
Girish Kousgi
Thank you.
operator
Thank you. Next question comes from the line of Suraj task with Chindaram Mutual funds. Please go ahead.
Suraj Das
Yeah. Hi sir. Thanks for the opportunity. Sir, one question. I think we alluded on the margin part but the question is, I mean despite favorable movements towards higher yielding portfolio it is not getting reflected in the yield part. This yield has not seen let us say much of benefit over the past four to six quarters despite you know you have to have a non mixed movement towards emerging and affordable which are relatively higher yielding versus prime and prime as a share is right Now I think 60, 63, 64.
So the question is that what would be the inflection point when it will get reflected in the yield part and the relative that is in terms of assignment income where to recognize it in the cnl is it in the interest income or is it in the, you know, non interest income? Yeah, I think that is my question one.
Girish Kousgi
So see the way we look at it is that you know we are very clear on our margin, right with with the repo going down. So obviously these also would, you know would get moderated to a certain extent. So we are very clear on the margins what we need from repo segment. So because with ripple going down even a cost will go down. Maybe it has, you know, with a little bit of lag and before we don’t have too much of control on the cost of borrowing or on the yield but we have full control on the margin.
Right. So it was almost about 100 in last six months time. To that extent if you look at the yield it is still very stable compared to quarter four and quarter one yield. So I think the way to look at it is we should look at how is the margin blending. The last quarter it was 3.75. This quarter it is 3.74 and we are guiding that this year will be around 3.7%. So earlier I had guided between 3.6 to 3.65. So now we are cutting the mean guidance to around 3.7%. So we are very, very clear on the margin. Yeah, there could be slight variation in the yield, slight variation in the cost. I think that is the way how we look at.
Vinay Gupta
Yeah and on the securitization income it is part of Interest income.
Suraj Das
You have not taken any similar rates, right? I mean like whatever Bajaj or pancakes does. So I mean what is your plan on passing on the interest rate on this planning shipment side, do you intend to take any PLR rates in the coming quarters or let us say in the second half.
Girish Kousgi
So two things happen when there is a repo cut. So one is the origination. This is for all including PND housing. Second is the benefit what the company approves because of the repo rate cut. So we have got the benefit of 8 gifts and we will be passing on 10 gifts from 1st of July.
Suraj Das
Okay. Until last weekend. I think extending the initiation that in terms of this asset quality fees in the affordable housing while the numbers have been muted. But let us say whatever customer segment that you are serving according to you, what would be the latest rate number where this 30 dtb or 90 dtb or even bouncer is stabilized? What is that level?
Girish Kousgi
So we are, we are as I mentioned earlier as well within upper double there are three subsegments. High risk, medium risk, low risk and our mix is going to be 20, 60 and 20%. So 20% of origination will be from high risk segment, 60% from medium risk segment and 20% from low risk segment. So given this mix we see the peak of MPA for us is going to be somewhere around 1 to 1.1%. Thank you.
operator
Thank you. Next question comes from the line of Abhishek Kumar Jain with Alfaccurate. Please go ahead.
Abhishek Jain
Thanks for the opportunity and congratulations for a strong set of numbers. My first question on the plant segment in this quarter we have seen very muted growth of just 1%. So what is your target for the disbursement growth in the plant segment for FY26?
Girish Kousgi
So the quarter one as I mentioned was little unusual this time because quarter one being cyclical also got added with the rate cut. Right. As I mentioned you we are very very clear on margins and we are doing two things. One we are increasing if you look at our disbursement share in quarter one emerging and upward as the so 50% origination is from affordable and mod. So we are more towards origination from affordable and emerging. So the growth in prime is going to be a balanced number. So we have guided book growth of 18% for this year and that would definitely be mixed. So if you look at the book growth in prime it’s going to be around, it’s going to be in single digit.
This is as per plan and this is a strategy not to go the prime book faster. It will always be a balancing number. So the growth in books and prime is going to be around 8, 9 and the disbursement should be around 12, 13 for the full year.
Abhishek Jain
Okay. And my second question on the ROE side to 5.5 and just wanted to understand what is your roadmap for achieving mid team ROE in the medium term?
Girish Kousgi
I think we all should understand that we raised capital recently and because of that there is a drag otherwise all of the parameters are in line as per the projections and as guidance. So we are also trying to look for opportunity where we can try and increase the pace of growth on book in all the segments. So I, I think in about let’s say three years or so we should get to around 14 or 15.
Abhishek Jain
Okay, that’s all from us.
Girish Kousgi
Thank you.
operator
Thank you. Next question comes from the line of Abhijit Tibriwal with Motilal OSWAL Financial Services Ltd. Please go ahead.
Abhijit Tibrewal
Yeah, thank you. Am I audible?
Girish Kousgi
Yes sir. Adihu.
Abhijit Tibrewal
Yeah. Hi. Good morning sir. These two things, while I mean congratulations on first quarter results and also heartening to see that you’ve increased your NIM guidance for the full year to 3.7% now. But just trying to understand given that we’ve seen a 50 basis points rate cut last month, reported that last month, what could mean trajectory look like for the next 2 to 3 quarters?
Now why I ask this is. I. Mean versus 3.74 that we reported in the first quarter. If we are writing for full year of 3.7, that essentially means that we are not looking at any margin compression in the coming quarters. So is that the right way of looking at it this time to understand what could mean trajectory look like in the second and third quarter. That’s my first question.
Girish Kousgi
So definitely if you look at next two to three quarters there could be further cut, I would not guess as to how much it’s going to be that could be cut. Right. But at the same time we also have a very clear plan to increase our margins in all the segments and therefore we are very confident our limit is going to be around 3.7, give or take lesser minutes to be fair. And.
Abhijit Tibrewal
Got it. And so then the second thing I wanted to understand is, I mean you have yourself kind of passed on 10 basis points effective July. Most of the other, I would say hfcs. Right. Have passed on in that same ballpark. Someone is at 10 like you. Some others are at 20, someone is at 25 basis points PLR cuts that we have seen. So there are two parts to that question that I wanted to understand.
First thing is, I mean, what’s our kind of strategy around these ALPO meetings and PLR cuts? What I’m trying to understand is it the quarterly recalibration in PLR that we do or can it be done even during the middle of the quarter? And secondly, despite these large HFCs not passing any PLR cuts, despite that, we are not seeing any significant increase in BP outs.
So where is the disconnect? I mean compared to past cycles, there used to be a big pressure on balance transfers in a declining rate cycle, which essentially meant that large HFCs had to pass on, I would say break cuts even before their liabilities got repriced. So if you could just help us understand this matter.
Girish Kousgi
We manage the costs very efficiently, efficiently and whatever benefits we get, we pass on to the customer. Now you can come with three to four months lag and we’ll also follow the same time. So that is the reason you will see different countries but you know, different. Some private, some nothing at all from 10, some 15. Right. I think we need to look at what works for PNB housing and PNB housing customers, number one. Number two, we have a very strong retention team. We always believe that retaining the customer is more profitable than acquiring a new customer and therefore we have a very good handle on our total closure.
If you look at total closures for quarter one, it is 16%. So if you remember it used to be about 21, 22% I think maybe 7, 8 quarters back and we have brought it down to 17 and now further down to 16. So if decreased at 6%. And if you look at the BP we have on prime in quarter, BTV was slightly lesser than BT out. Otherwise BT and BD both are still in time. This quarter being a little bit of exception. So for this quarter on prime business, BT yield is slightly lower than btl, an emerging business, VT in and VT out is almost similar and on affordable we have significantly higher VTV compared to VT out.
So we have a very good handle on customer retention and eventually VT out is going to be a much controlled number for us and that is why we are able to do it.
Abhijit Tibrewal
Got it. And since there’s one last data keeping question, you share it the next call. So in our affordable business this quarter, whatever disbursements that we did, what was the proportion of BP in the affordable business?
Girish Kousgi
So BP this is on the portfolio. So BP in was about 1% and BP out is hardly anything because it’s a needle.
Abhijit Tibrewal
And so BP in you said was 1% .
Deepika Gupta Padhi
12.
Abhijit Tibrewal
Okay, thanks. Yeah, that’s also my third and congratulations and all the very.
operator
Thank you. Next question comes from the line of Viralshah with IFL Capital. Please go ahead.
Viral Shah
Yeah, hi, good morning. And I would say congratulations on good set of numbers. Two questions. One is you have reclassified 20 of your prime branches to emerging segments. I know historically that is how we started say building out this segment. But this also means is that our share of say affordable plus emerging which was 25% until last quarter quarter goes up by close to 11%. Right. So does our say target mix for FY27 or by end of FY27 of 40% also correspondingly rise to 50%? Because with this 10 kind of shift inherently the profitability of the business currently doesn’t change. Right. At an overall level, I mean to.
Girish Kousgi
There are two answers to this question. So this movement of branches from prime to emerging or emerging to approachable is more market driven and segment driven. So we are doing this for last about three years. So when we started emerging business, so we carved out certain bit of branches in the prime, you can see that steel branch moved to emerging segment and therefore it was almost about 23 and 27. So this is a continuous exercise because our strategy, our focus is to completely move towards affordable and affordable index, say next four to five year time.
This will be an ongoing process. To answer your second question here, that 40% will now obviously go up. Definitely. Because when we had planned 40% we have not taken into account movement of these 20 gr. So the.
Viral Shah
Okay, so that 40 goes to 50% is that.
Girish Kousgi
Yeah, so we need to work the, we need to work the math, maybe give one or two, but definitely.
Viral Shah
Got it, sir. So my second question was on.
Girish Kousgi
Going forward. Also going forward, depending on the opportunity, we would convert prime into emerging. The way we would convert is that wherever we feel the branches are more closer to emerging market, we move that from prime to emerging and we will recast so that we have a apple to apple comparison. Or we might take a decision to place a prime rank in the location and open one emerging branches in the same city, the segment is different. So this keeps on happening.
Viral Shah
Got it. That’s very clear. So my second question is on the asset quality piece now I understand of course our book is now gradually getting seasoned on the affordable side, which is why on a sequential basis we see these numbers. Can you give some sense on what is the rollback rate? Because as you mentioned the bounce rate I think is controlled and is materially lower than the tiers. So season book for them. But when I look at say one and a half year sale on a lagged basis of 30 plus numbers, I think we are still probably somewhere in line with what peers are there the season book.
But on a sequential basis that number has increased. So while the bounce rates are controlled, what is the kind of say rollback rates that we see after say maybe missing on say 1 +bpd or 30 +bpd if you can give those numbers.
Girish Kousgi
See I had partly addressed this question earlier. So I had also told maybe next four to five process we would see an NPA in close to maybe 0.75 points, 8% and eventually about 1 point. So given the mix of the segments into which we are within the affordable segment, we are looking at the peak of about 1.1% and if you look at our bounce it is still at 11.5%. Very much in the context because at least, at least a bounce look is right even to take on a lag basis. I think cases which are into various pockets.
It’s very encouraging. Yes, C has gone up also. We go up 90% also. But that will be much lower than the industry average in terms of roll forward and roll back. We will pay the light separately with you because we don’t have the numbers.
Viral Shah
Sure, sir. Thank you. And just one clarification sir. When you said that you will be better than the peer, you mean to say on a seasoned book, right? So maybe a year or two years down the line.
Girish Kousgi
Yeah, yeah. So I’m. I’m only saying like to like comparison. On a like to like comparison. We would be definitely better than the competition, will be better than the industry.
Viral Shah
Got it sir. Thank you so much. And all the benefits.
Girish Kousgi
Thank you.
operator
Thank you. Next question comes from the line of Watson, Nagaria and individual. So please go ahead.
Unidentified Participant
I have a question on the affordable audience segment. One of your peers mentioned that they are seeing developers pulling back supply in the segment as a result of difference in the new PMAY scheme. So are you seeing going forward that the system level growth in the affordable housing will slow down and how has been the on ground implementation of the PMIY 2.0?
Girish Kousgi
I didn’t hear the first part of the question. I heard the second part. If you could please repeat the first part.
Unidentified Participant
Yes. So it’s one of your peers mentioned that developers are pulling back supply in this affordable housing segment as a result of the difference in the new tier that tnr. So are you also seeing that?
Girish Kousgi
No. Okay, I’ll Tell you so it is not the right comparison. So interest subsidy scheme with the earlier PLSS for many reasons due to cost of time. I just mentioned three reasons now in terms of quantum. So this time the interest subsidy amount might be little less But I think for the lending decision and for the customer it is a big win for three reasons. One, the subsidy what the customer gets is in 5 annual. So within those five years customer won’t be allowed to switch. If customer switches the institution then the subsidy stops. So this is a big plus for the lending institution because customer would remain on book for at least five years number one.
Number two, customer cannot be diligent. If success seller becomes delinquent then the subsidy stops which means customers are motivated to keep their repayment track record satisfactory. So these are the benefits. And number three, this time you know as a lending institution we also get affordable funding from the regulator initially so that we can on lend to our customers. So these are also benefits. So it can’t be exactly compared with the early. This scheme has taken off well and we are seeing good traction and this will gain more traction in the coming quarters. So we see this scheme as very very attractive and this is going to propel growth in the October.
Unidentified Participant
Thank you.
operator
Thank you. Next question comes from the line of Rusmal Handu with Goldman Sachs. Please go ahead.
Unidentified Participant
Hi, good morning. Good morning team. My question is on emerging markets.
Girish Kousgi
Your voice is very feeble. It can be little bit louder.
Unidentified Participant
Are you able to hear me better?
Girish Kousgi
Yeah, slightly better.
Unidentified Participant
Yes. So my question is on emerging markets, the book has grown quite nicely and therefore wanted to ask a question on asset quality here. How are the early indicators stacking up for this part of the book? If you have some numbers that you could also share any color as well on bound F or 30 DBT etc that would be very helpful.
Girish Kousgi
In terms of segment prime and energy there is very less difference and surprisingly for us, emerging market delinquencies are not better than prime. So that may be because of legacy book. But even on the new origination we have seen no difference between prime and emerging. So in terms of trade costs, I had mentioned earlier on the prime we expect a credit cost of about 18 19. This was 20 to 23. So that’s the difference between fine and not limited.
Unidentified Participant
Okay, okay, that helps. Thank you so much.
Girish Kousgi
Thank you.
operator
Thank you. Next question comes from the line of Yash with mipl. Please go ahead.
Yash S
Hi, am I audible?
Girish Kousgi
Yes, you’re audible.
Yash S
Most of my questions are answered but minor clarification. I just wanted to understand what are. The KPIs that are being tracked internally. That allow you to switch a prime branch into an emerging markets branch. Like what are the things that they. Have to achieve internally for this reclassification to happen?
Girish Kousgi
There is nothing. It is market driven. So if you feel that in a particular market offers opportunity to originate at a higher heat, we need to understand. So every market would have multiple segments, certain segments would be dominating. So we identify locations where the potential foreigner deal with slightly higher than prime. But we have a prime branch. In those cases we migrate the branches from prime to mit. So this transition would take about three months time and after three months time we let go of prime business and we completely focus on emerging business. So that is the approach what we take. It is more market driven and more.
Yash S
Okay, got it. Congratulations on a good set of numbers. Thanks.
Girish Kousgi
Thank you.
operator
Thank you. The next question comes from the line of Omka Shinde with Ascendancy Capital. Please go ahead.
Unidentified Participant
Hello. Thank you. So a few statistical questions then I’ll statistics and I’ll come to my questions. So. So what is the overall LTV of the book and what is the LTV in the affordable segment?
Girish Kousgi
Overall LTV should be around 66, 67% and in affordable it comes down to about 53.
Unidentified Participant
Sorry, the affordable 1,354. Okay. And I have a statistic question on what is that individual housing loan book on an Overall basis the individual.
Girish Kousgi
71 book.
Vinay Gupta
71 is a individual .
Unidentified Participant
On book or the A on the loan? Okay. Okay. And finally what is the number for the sanctions for this quarter? Number of sanctions that on amount and count.
Girish Kousgi
We generally don’t say that because what happens is that for a sanction really, you know, beyond the point, it doesn’t really matter because there will be a lot of cases which you might lose to competition and we might. So if you, if you look at on an average last year four quarters we would be sanctioned to divergent ratio should be somewhere around 64 65%.
Unidentified Participant
Okay. Okay. So actually.
Girish Kousgi
Why we don’t say this number is there? No, we can’t assume that 35% is there for me in the next quarter because we might end up losing maybe 3, 4, 5% and then we might also to gain similarly.
Unidentified Participant
Understood. So sir, now going to the yields on the questions part. So the yields we have seen to buy CR back in the affordable segment 6 to 12.1. Given that we have already started taking a few cuts in the rates, where do you see the yield in affordable segment? You know, stabilizing it because as you’re saying that margins are going to be up focus area. And if I’m right you said that we’ll be trying to reach over the medium term 4% of limbs. So what is the outlook there?
Girish Kousgi
So this year the yield should be about 12.6 to 12.65 and next year getting close to 30.
Unidentified Participant
Okay, close to 13 next year.
Girish Kousgi
Yeah.
Unidentified Participant
And with respect to the what is saying asset quality, is there any specific reason like for example in Karnataka or anything where the audience is there or any specific region of outside where we are seeing, you know, asset quality issues. Because one of our peers is saying that in Telangana they are facing a lot of issue. Karnataka policies are being solved. So some color on, on the southern region or any, any place else where we are seeing any earlier warning signs. Because although security has remained good, bounce rates are in control. Are you you know like come before the storm situation?
Girish Kousgi
No, we have very less overlap between our affordable customers and innovators and therefore we don’t see any stress anywhere.
Unidentified Participant
It’s not msi. So this is like your affordable, affordable housing or housing HST like one of the ps. So is there any asset quality issues that you’re seeing early warning signs, anything of that? So nothing.
Girish Kousgi
Not at all. Why I mentioned MSI is that if you see in last four to six quarters there was stress in MSI and also also in the small ticket unsecured segment. So if you have to talk about only affordable, we don’t pay any.
Unidentified Participant
Okay. Okay. And finally on the credit rating. So we are at a double atlas. We have seen a few of our peers getting credit rating improvement. What is our you know, you know status on that? Can we expect.
Girish Kousgi
We are also hoping an upgrade maybe next few quarters.
Unidentified Participant
So, so any, any connections or you know talks with the credit rating agency. discussions are on.
Girish Kousgi
Discussions are on. So we are hoping in the next few quarters we should also get upgraded.
Unidentified Participant
So maybe by end of FY26 we could see. Would that be possible?
Girish Kousgi
I can say next maybe four to five quarters.
Unidentified Participant
Okay. Okay. Okay. Thank you.
Girish Kousgi
Thank you.
operator
Thank you. Next question comes from the line of Pawan Kumar with Shade Capital. Please go.
Unidentified Participant
Thank you for the opportunity. I’m audible.
Girish Kousgi
Please be audible.
Unidentified Participant
Yeah. So my first question is regarding the yield differential between prime and emerging is roughly 20 to 30 basis point. Would that increase going forward?
Girish Kousgi
It will increase.
Unidentified Participant
Okay. And secondly like as you’re saying now your focus is towards emerging market. Are we getting some softening of supply side in terms of like kind of like lows we are looking for in the prime or is it just like we are recalibrating towards emerging and affordable.
Girish Kousgi
There is lot of demand in all the segments whether it is super prime, prime, emerging or affordable. We want to do best on prime because prime comes at a very thin margin and people we want to do better.
Unidentified Participant
Thank you for the clarification and congratulations again for good setup numbers. These are my questions. Thank you.
Girish Kousgi
Thank you.
operator
Thank you ladies and gentlemen. Due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Deepika Gupta Padhi
Thank you everyone for joining us on the call. If you have any questions unanswered please. Feel free to get in touch with Invest. The transcript of this call will be. Uploaded on our website. Thank you.
operator
Thank you on behalf of PNB Housing Finance limited that concludes this conference. Thank you for joining us. You may now disconnect your lines.