Buy Poonawalla Fincorp; target of Rs 600: Motilal Oswal

Motilal Oswal is bullish on Poonawalla Fincorp recommended buy rating on the stock with a target price of Rs 600 in its research report dated November 20, 2025.

Broker Research

November 21, 2025 / 11:37 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Poonawalla Fincorp

We hosted Mr. Arvind Kapil, MD & CEO of Poonawalla Fincorp (PFL), for a meeting with a group of foreign institutional investors to discuss the company’s future trajectory and the progress achieved over the past year under the new leadership team. PFL continues to deliver on its stated ambition of building a digitally enabled, multi-product, and high-ROA retail lending franchise. Under the leadership of its new MD & CEO, the company has rapidly scaled newer businesses, invested significantly in AI-driven risk and operational systems, and strengthened its governance and cultural fabric. The strategy focuses on disciplined, diversified growth with balanced exposure across secured and unsecured retail products. The organizational culture is driven by a focus on high performance and innovation, coupled with a commitment to continuous improvement. With multiple new products scaling well, robust risk practices, and strong execution capabilities, PFL is well-positioned to sustain (or potentially exceed) its ~35- 40% AUM CAGR guidance, while improving profitability. The company targets to achieve its guided ROA of 3.0-3.5% by Jun’28, supported by higher operating leverage, superior cross-sell, and cost efficiency from automation. Over the next 4-5 years, the company aspires to set the stage for greater revenue stability, supported by sustained growth and consistent improvement in ROA.

Outlook

PFL trades at 3.2x FY27E, and we estimate AUM/PAT CAGR of 42%/92% over FY26-FY28E with RoA/RoE of 2.6%/20% in FY28E. Reiterate our BUY rating on the stock with a TP of INR600 (premised on 3.7x Sep’27 BVPS).

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