Buy Poonawalla Fincorp; target of Rs 580: Motilal Oswal

Motilal Oswal is bullish on Poonawalla Fincorp recommended buy rating on the stock with a target price of Rs 580 in its research report dated January 19, 2024.

Broker Research

January 19, 2024 / 13:26 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Poonawalla Fincorp

Poonawalla Fincorp (PFL)’s 3QFY24 NII grew 63% YoY to INR4.9b (6% miss), while PPOP jumped 125% YoY to INR3.5b (in line). 3Q PAT surged 76% YoY to ~INR2.65b (in line), while 9MFY24 normalized PAT grew 72% YoY to ~INR6.95b. Opex declined 2% YoY to ~INR2b (~6% lower than estimate), while the C/I ratio remained broadly stable QoQ at ~36% (PY: ~57%). Provision writebacks stood at INR65m (vs. estimated credit costs of ~INR300m) PFL is dedicated to enhancing productivity, aided by digitization. It is gearing up for expansion with new products such as co-branded credit card, EMI cards, and dropline flexi products. PFL has laid down a robust foundation for sustainable profitability through initiatives that will lead to lower operating costs (as a % of AUM), higher business volumes, and robust asset quality.

Outlook

We model a CAGR of ~42%/51% for AUM/PAT over FY23-FY26 and expect PFL to deliver an RoA/RoE of ~5.0%/~20% in FY26. Reiterate BUY with a TP of INR580 (premised on 4x FY26E BVPS).

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