Shares of PNB Housing Finance slipped over 12 percent on Friday after it posted weak December quarter earnings. The scrip touched intraday low of Rs 476.80 on falling 12.07 percent against the previous close of Rs 542.30.

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At 1:25 pm, the stock was trading 10.30 percent lower at Rs 486.45 per share.

The company has posted a 22 percent degrowth in its Q3FY20 net profit at Rs 237.02 crore versus Rs 302.97 crore YoY.

Net interest income (NII) was up 1.4 percent at Rs 566 crore versus Rs 558 crore, YoY. CNBC-TV18 poll had estimated NII at Rs 544 crore.

Net interest margin was reported at a five-quarter low of 2.98 percent.

Revenue from operations declined marginally to Rs 2,074.76 crore in the December quarter. Provisions in Q3FY20 were at Rs 180.8 crore versus Rs 70.1 crore YoY and versus Rs 151.6 crore QoQ.

Company’s assets under management (AUM) as on December 31, 2019 increased 8 percent to Rs 86,297 crore from Rs 79,737 crore as on December 31, 2018.

Loan Assets degrew by 2 percent YoY to Rs 69,194 crore as on December 31, 2019 from Rs 70,717 crore as on December 31, 2018.

Asset quality deteriorated sharply as gross non-performing assets (NPA) as a percentage of gross advances rose to 1.75 percent from 0.84 percent and net NPA increased to 1.44 percent from 0.65 percent QoQ.

Gross NPA increased to Rs 1,212.8 crore as compared to Rs 624.1 crore and net NPA rose to Rs 867.9 crore versus Rs 485.1 crore QoQ.

The mortgage lender said that its promoter Punjab National Bank will not sell the current holding in the company and maintain a minimum shareholding of 26 percent as a promoter.

Global brokerage Jefferies maintained ‘Hold’ rating on the PNB Housing Finance stock but raised target price to Rs 525 from Rs 505 per share.

The brokerage sees challenges to loan growth. It cut FY20-21 estimates by 6-23 percent.

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