Poonawalla Fincorp Share Price Target Q4FY24 Results: Buy, Sell or Hold?

Poonawalla Fincorp Share Price Target: In an era marked by swift economic fluctuations, Poonawalla Fincorp, a distinguished non-banking financial company (NBFC) in India, presents a promising investment prospect with an upward revision in its share price target.

As of May 9, 2024, KRChoksey Research has set a revised share price target of INR 555 for Poonawalla Fincorp, adjusting from a previous estimate of INR 580. This revision follows a quarter marked by robust business growth and a continued improvement in asset quality. Despite a slight adjustment in its adjusted book value, the firm retains an 18.3% potential upside from the current market price (CMP) of INR 469.

Poonawalla Fincorp Share Price

The company reported a staggering 48.1% year-over-year increase in its Net Interest Income (NII) for the fourth quarter of fiscal year 2024, amassing INR 5,625 million. Furthermore, Poonawalla Fincorp’s profit after tax saw an 83.6% increase compared to the previous year, culminating in INR 3,317 million—a figure surpassing initial estimates primarily due to a lower tax rate.

Strategic decisions have played a pivotal role in this growth trajectory. The Board of Directors chose to conserve capital by not declaring a final dividend for FY24, focusing instead on long-term value creation. Moreover, the company achieved a record high in quarterly disbursements, amounting to INR 96,880 million, an increase of 52.1% year-over-year, fueled by aggressive customer acquisition strategies.

In terms of asset management, the ratio of secured to unsecured loans has been balanced at approximately 50-50. This strategic positioning is supported by strong disbursements in loan against property (LAP), purchase order credit (POC), and micro, small, and medium enterprises (MSME) lending, all contributing to the growth of the secured book.

Looking ahead, Poonawalla Fincorp has set ambitious targets for the upcoming fiscal year. It aims to grow its assets under management (AUM) by 30.0-40.0%, focusing on improving margins and profitability. The company has also secured regulatory approval to launch a co-branded credit card with IndusInd Bank, expected to debut in the next two to three weeks.

The NBFC’s operational performance has also seen significant enhancements, with the cost-to-income ratio improving and the Net Interest Margins (NIMs) witnessing incremental growth. Asset quality continues to improve, with gross and net non-performing assets (NPA) ratios declining, reflecting a prudent credit policy and effective risk management.

As Poonawalla Fincorp nears the completion of its Vision 2025, the focus now shifts towards sustaining this growth momentum through further digital initiatives and an enhanced customer service framework.

This strategic foresight, combined with robust fiscal management, positions Poonawalla Fincorp as a resilient player in the NBFC sector, promising steady growth in the face of ongoing economic challenges. Investors and market watchers alike look forward to how these strategies will unfold in the near future, potentially leading to significant gains in share value.

Poonawalla Fincorp Share Price Target

Date9th May 2024
CompanyPoonawalla Fincorp
CMP (Rs)Rs. 469
Target PriceRs. 555
Potential Upside18.3%
Market cap (Cr)3,65,820
AuthorKRChoksey

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Harry Prajapati
Harry Prajapati

Harry Prajapati is the creator of sharedhan.com. In 2006, he named the website "Sharedhan," which means share market wealth, to reflect its aim of providing information on making wealth through the share market. He has been a lifelong editor and writer with over 10 years of experience as a stock market & Business blogger.

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