Poonawalla Fincorp share price rises over 3% after strong Q1 results
Poonawalla Fincorp share price rose over 3% on Tuesday after the non-banking finance company (NBFC) reported its Q1 results. The stock gained as much as 3.21% to ₹380.05 apiece on the BSE.
The Pune-based company posted a 62% rise in net profit at ₹200 crore in the June quarter, as compared to ₹124 crore in the year-ago period. This was the company’s highest ever quarterly profit.
The company’s total income in Q1FY24 jumped to ₹712 crore from ₹429 crore, YoY.
Poonawalla Fincorp is a financial services arm of the Adar Poonawalla-led Poonawalla Group.
The company’s interest income rose to ₹656 crore from ₹386 crore in the year-ago quarter.
Net Interest Margin (NIM) for Q1FY24 was at 11.4%, an improvement of 108 bps YoY and 12 bps QoQ.
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Asset quality at the end of June 2023 quarter improved marginally on a sequential basis. Its Gross non-performing assets (NPA) in Q1FY24 were at 1.42% of gross advances, down 2 bps QoQ. Net NPA also fell 2 bps QoQ to 0.76%.
The capital adequacy ratio of the increased to 36% at the end of June 2023.
Poonawalla Fincorp recorded highest ever quarterly disbursements at ₹7,063 crore, up 143% YoY and 11% QoQ.
Its Assets Under Management (AUM) at ₹17,776 crore were up 41% YoY and 10% QoQ.
Analysts believe consumer and small business finance, the segments targeted by Poonawalla Fincorp, have a huge market opportunity.
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Brokerage firm Motilal Oswal Financial Services believes that the company has levers to maintain NIMs of 10% over FY24-FY25E.
“We model benign credit costs of 0.7% in FY24. Strong leadership teams across functions, realignment of customer and product segments, and focus on leveraging technology/analytics, position Poonawalla Fincorp well to build scale and deliver superior risk-adjusted returns,” Motilal Oswal said.
The brokerage firm reiterated its ‘Buy’ rating with a target price of ₹425 per share.
Poonawalla Fincorp share price has risen over 20% YTD, while it has rallied more than 41% in one year.
At 11:00 am, the shares of Poonawalla Fincorp were trading 1.25% higher at ₹372.80 apiece on the BSE.
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Updated: 25 Jul 2023, 11:04 AM IST