Why Did PNB Housing Finance Stock Drop 16% After CEO's Resignation?
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Synopsis
In a shocking turn of events, PNB Housing Finance's stock tumbled 16% following the resignation of CEO Girish Kousgi. The company, which has shown remarkable growth, now faces uncertainties as it seeks new leadership. What does this mean for investors and the future of the housing finance giant?
Key Takeaways
- Stock Drop: Shares fell 16% after CEO resignation.
- Financial Performance: Q1 FY26 net profit grew by 23%.
- Leadership Transition: Search for new CEO underway.
- Strong NIM: Expected NIM of 3.7% for the fiscal year.
- Resilience: Company remains committed to its strategic goals.
Mumbai, Aug 1 (NationPress) Following the resignation of its MD and CEO Girish Kousgi, the board of PNB Housing Finance has seen a significant drop in the company's stock, plummeting by 16 percent during intra-day trading on Friday.
The share price dipped to Rs 838.3 on the BSE, hitting the lower circuit limit. At 9:28 AM, the shares were noted at Rs 887.6, marking a 10 percent decrease.
During the earnings call post the June quarter results, Kousgi expressed optimism about achieving a higher net interest margin (NIM) target of 3.7 percent for the fiscal year, a rise from the previous 3.6–3.65 percent, due to contributions from affordable and emerging segments.
In the first quarter of FY26, PNB Housing Finance reported a 23 percent year-on-year increase in net profit, reaching Rs 534 crore. This robust growth was attributed to strong loan expansion, a 3.74 percent NIM, and better asset quality.
Numerous brokerages have credited Kousgi for this success, indicating that his departure may hinder the stock’s performance. The board has committed to swiftly commencing a search for a “seasoned professional with substantial expertise and industry experience.”
R Chandrasekaran, the Chairman of the Nomination and Remuneration Committee at PNB Housing Finance, stated, “The Board will initiate a rigorous, transparent, and merit-based selection process for appointing a new leader, who will continue to enhance the legacy of PNB Housing Finance. We are confident in identifying a suitable individual soon to drive our strategic direction and long-term value creation.”
Kousgi announced his resignation on October 28 to pursue other career aspirations. Previously, the shares were trading at Rs 947 each, although the current price remains above the 52-week low of Rs 746.
Promoted by Punjab National Bank, PNB Housing Finance ranks as India's third-largest housing finance company. Following the Carlyle Group's exit from its stake on May 2, 2025, PNB became the largest shareholder with approximately 28.1 percent of holdings. On August 1, PNB Housing Finance assured that its strategic priorities, business focus, and growth trajectory remain 'firmly intact', building upon Kousgi's foundation.
This mid-cap housing finance entity has maintained an average Return on Equity (ROE) of 11.6 percent over the last three years, with a Price-to-Earnings (P/E) ratio of 10.5 and a Price-to-Book (P/B) ratio of 1.27.
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Point of View
The resignation of Girish Kousgi from PNB Housing Finance marks a pivotal moment for the company. His leadership has been instrumental in driving growth, and while the recent stock drop raises concerns, the company's robust fundamentals suggest resilience. With a proactive approach to finding a new CEO, PNB Housing Finance aims to navigate this transition effectively, maintaining its commitment to stakeholders and continuing its growth trajectory.
NationPress
05/09/2025
Frequently Asked Questions
What caused PNB Housing Finance's stock to drop?
The stock dropped by 16% following the resignation of CEO Girish Kousgi, raising concerns about future leadership and direction.
What was the company's performance before the resignation?
Prior to the resignation, PNB Housing Finance reported a 23% year-on-year growth in net profit for Q1 FY26 and maintained a strong NIM.
How is the company planning to address the leadership gap?
The board will initiate a rigorous and transparent search for a seasoned professional with industry expertise to ensure continuity.
What are the financial metrics of PNB Housing Finance?
The company has an average ROE of 11.6%, a P/E ratio of 10.5, and a P/B ratio of 1.27 over the past three years.
What strategies does PNB Housing Finance have moving forward?
The company has assured that its strategic priorities and growth trajectory will remain intact despite the leadership change.
