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.
Also Read: Tata Steel share price gains over 1% after Q1 results meets estimates; here’s what brokerages have to say
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.
Also Read: ITC share price continues to fall for second day after hotel business demerger
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.
Catch Live Market Updates here
Know your inner investor
Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
Download Finplay News App to get Daily Market Updates.
More
Less
Updated: 25 Jul 2023, 11:04 AM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.