Strong AUM growth (68% y/y, 15.6% q/q) and better NIM led to Poonawalla Fincorp's Q2 FY26 ~39% y/y PPoP growth to Rs3.6bn. Capital infusion of Rs15bn by the promoter will further increase growth prospects for the NBFC. Despite premium valuations, we retain a Buy, valuing it at 4x Sep’27e P/BV (earlier 3.9x) as a marquee management team, risk precision capabilities and strong tech architecture will drive the fastest growth among peers (a 46% AUM CAGR over FY25-28), with improving RoA prospects to 2% in FY27.
OutlookOur Sep’27e TP of Rs 622 is based on the multi-stage DDM model. This implies ~4x P/BV.
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