Reduce Poonawalla Fincorp; target of Rs 440: Emkay Global Financial

Emkay Global Financial recommended reduce rating on Poonawalla Fincorp with a target price of Rs 440 in its research report dated January 19, 2024.

Broker Research

January 19, 2024 / 13:50 IST

reduce

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Poonawalla Fincorp

Poonawalla Fincorp maintained its strong operational momentum in Q3FY24 too, with AUM growing 9% QoQ to Rs219bn, disbursement at Rs87bn (+12%QoQ), adj. PAT at Rs2.65bn (+15% QoQ), and GS3/NS3 at 1.33%/0.70% (-3/-2bps QoQ). The company also marked good progress on the product and tech fronts in Q3, with a co-branded card partnership, app launch, and increasing Direct-Digital sourcing. But accelerated repayment (Rs70bn in Q3) and lower credit cost likely being driven by the extant large contingent buffer (total ~Rs13bn, as of Q2FY24) raise some concerns around sustainability & scalability of the business model. Overall, the management remains satisfied with the execution of its ‘digital first’ and urban prime focused strategy; it is also confident about Company’s future growth and profitability.

Outlook

Accounting for the Q3 developments, we adjust our FY24-26 estimates; we reiterate REDUCE on the stock and Dec-24E TP of Rs440/share (implied FY25E P/BV: 3.6x).

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