Poonawalla Fincorp Q4 Review – Execution, Asset Quality Improve: Nirmal Bang

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Poonawalla Fincorp Ltd. reported profit after tax of Rs 1.2 billion, ahead of our estimate due to writeback of excess provisions, which were partially offset by higher opex.

Net interest income was up by 24% YoY, ahead of assets under management growth of 16.5% YoY due to net interest margin expansion to 9.5%.

Interest yields on AUM declined to 12.2% due to change in the product mix. However, this was more than compensated by reduction in the cost of funds, which was down by 209 bps YoY at 7.4%.

Opex was elevated due to investment in technology and people.

Organic disbursements (Rs 22 billion) grew by 54% YoY and 43% QoQ while overall disbursements (Rs 33.4 billion) grew by 134% YoY and 81% QoQ.

Poonawalla Fincorp achieved leadership position in pre-owned cars and loans to professional category in March 2022 disbursements.

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