Poonawalla Fincorp Ltd. share price target

For Q4FY25, Net Interest Income (NII) came in at INR 6,101 Mn., up 8.5% YoY (-0.6% QoQ), below our estimates driven by higher-than-expected interest expenses. The Pre-Provision Operating Profit (PPOP) stood at INR 2,384 Mn, reflecting a 41.8% YoY decline (-36.1% QoQ) driven by sharp increase in employee and other operating expenses.

Poonawalla Fincorp (Poonawalla) reported mixed Q4FY25 earnings with PAT at INR 0.6bn or 76bps RoA, wherein opex continued to be elevated. However, there was some respite on credit cost front with sequential decline.

Poonawalla reported another patchy quarter (Q4) with elevated credit cost (3.03% of AUM) and opex (4.6% of AUM) pushing profitability materially lower (RoA of 0.76%).

Poonawalla Fincorp (PFL)’s 4QFY25 PAT declined ~81% YoY to ~INR623m (MOFSLe: INR1.8b). FY25 loss was INR983m (vs. PAT of INR10.3b in FY24).

For Q3FY25, Net Interest Income (NII) increased by 25.1% YoY and 9.8% QoQ, reaching INR 6,141 Mn, surpassing our estimates by 3.8% due to lower-than-expected interest expenses. The Pre-Provision Operating Profit (PPOP) stood at INR 3,731 Mn, reflecting a 6.5% YoY increase and a 33.6% QoQ growth.

Poonawalla Fincorp’s (PFL) 3QFY25 PAT declined ~93% YoY to ~INR187m (vs. MOFSLe: INR1.52b). NII grew ~25% YoY to ~INR6.1b (in line), while PPoP grew ~7% YoY to ~INR3.7b (in line).

Net Interest Income (NII) for Q2FY25 increased by 17.8% YoY (-2.9% QoQ) to INR 5,592 Mn. Pre-Provision Operating Profit (PPOP) stood at INR 2,792 Mn, a sharp decline of 16.8% YoY (-35.4% QoQ) in Q2FY25, which includes a one-time opex of INR 710 Mn.

Poonawalla Fincorp (PFL)’s 2QFY25 loss stood at ~INR4.7b (MOFSLe: INR3b+). The company reported a loss in 2QFY25 mainly due to a one-time provision in STPL book of ~INR6.7b and a one-time opex of ~INR710m from investments in technology.

Poonawalla Fincorp reported disappointing Q2 numbers with the credit cost of Rs9.1bn (including Rs6.7bn one-time provisioning on the STPL book) leading to the company posting a Rs4.7bn loss.

Net Interest Income (NII) for Q1FY25 increased by 36.8% YoY (+2.4% QoQ) to INR 5,761 Mn. NII growth was 4.0% lower than our estimates due to lower-than-expected AUM yields.

Poonawalla Fincorp’s (Poonawalla) new MD & CEO – Arvind Kapil – revealed that its guiding philosophy across businesses would be productivity, predictability and sustainability.

Poonawalla reported a good quarter, with profit, AUM growth, asset quality, and credit cost broadly in-line-to-slightly-better than consensus/our estimates.

Poonawalla Fincorp (PFL)’s 1QFY25 NII grew ~37% YoY to ~INR5.8b (5% miss), while its PPoP increased ~47% YoY to ~INR4.3b (9% miss).

Poonawalla Fincorp reported a decent set of numbers with continued robust business momentum and improvement in asset quality. Net Interest Income (NII) for Q4FY24 increased by 48.1% YoY (+14.6% QoQ) to INR 5,625 Mn.

Poonawalla Fincorp (PFL)’s 4QFY24 NII grew 48% YoY to ~INR5.6b (in line),
while its PPoP surged 103% YoY to ~INR4.1b (in line). PFL’s 4QFY24 PAT
jumped 84% YoY/25% QoQ to ~INR3.3b (9% beat), while its FY24 normalized
PAT grew 75% YoY to ~INR10.3b

Poonawalla Fincorp Ltd has a strong aspiration to be amongst India's Top 3 NBFCs in consumer and MSMEs with a risk-calibrated accelerated growth of 3x from the FY21 AUM levels. The NBFC is laser-focused on its target segments of consumers & MSMEs and plans to accelerate its strategy of being a tech-led, digital-first retail lending franchise.

Poonawalla Fincorp (PFL) continued to deliver on its stated strategy with RoA sustaining at 4.8% driven by strong AUM growth at ~10% QoQ. Notably, despite the strong growth momentum, total operating expenses continued to decline (down 11% QoQ in Q1FY24) resulting in cost-income ratio falling to 38% in Q1FY24 from 58% in Q1FY23.