Previously known as Magma Fincorp, Poonawalla Fincorp is an NBFC under the Cyrus Poonawalla Group. Having strong backing and technology in place, brokerage and research firm Anand Rathi sees a potential upside in it.
Anand Rathi has given a “Buy” rating for Poonawalla Fincorp, with a target price of ₹417 per share. As of April 6th, the stock was trading at ₹290.05 per share, taking the upside to 43 percent. The shares of Poonawalla Fincorp fell to ₹288.3 before climbing to ₹294 and selling to ₹290, shedding a fractional 0.34 percent from the previous day’s closing price.
In a filing with BSE, Poonawalla Fincorp Ltd announced that they witnessed their highest-ever loan disbursements in Q4 2023 at ₹6,370 crores. This is an increase of 151% year on year and 89% quarter on quarter. For reference, Q4 2022 and Q3 2023 saw disbursements of ₹2,539 crores and ₹3,369 crores respectively.
The brokerage expects a 38 percent loan CAGR from FY 2023 to FY2025, due to competitive cost of funds, rapid growth, and technology.
The broker stated that PFL has developed conservative underwriting practices, combined with strong risk management. The BSE filing also showed that assets under management of the company grew by a substantial 37 percent year on year and 16 percent quarter on quarter, making it one of the best performers in the BFSI sector.
Risks:
The brokerage sees a higher-than-expected risk due to the recent slowdown in the economy, along with increasing competition from banks in the retail lending sector. Both factors could directly affect loan growth.
Anand Rathi stated that strong promoter backing led to a steep 250 bps decline in the cost of funds in 18 months. Adar Poonawalla acquired Magma Fincorp in March 2021 and soon rebranded it and its subsidiaries to Poonawalla Fincorp.
Written By Karan N
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
