Shares of Poonawalla Fincorp Ltd.'s stock was rewarded for its blockbuster Q2 fineprint and registered a sharp jump of 8.20% shortly after the opening bell on Monday.
The shares jumped to a high of Rs 484, but pared a lot of their gains to trade 2.75% higher at Rs 459.85 as of 10:21 a.m. on the NSE.
Poonawall Fincorp Q2 Results
Poonawalla Fincorp reported a sharp jump in earnings for the September quarter, with net profit rising over five-fold year-on-year, supported by healthy growth in income, improving margins and stable asset quality.
The non-banking financial company (NBFC) posted a net profit of Rs 375 crore for the second quarter of fiscal year 2027, compared with Rs 74.2 crore in the corresponding period last year. On a sequential basis, profit rose from Rs 308 crore reported in the June quarter.
Total income surged 70% year-on-year to Rs 2,625 crore from Rs 1,543 crore, while assets under management (AUM) stood at Rs 74,008 crore as of September 30, 2026.
Net interest income, including fees and other income, rose 12.3% sequentially to Rs 1,589 crore. Net interest margin (NIM), including fees and other income, improved by 16 basis points quarter-on-quarter to 9.26% from 9.10%.
The company also reported an improvement in profitability metrics. Return on Assets (RoA) rose to 2.18% in Q2 FY27 from 1.98% in the previous quarter.
Asset quality remained stable, with Gross Non-Performing Assets (GNPA) improving to 1.2% from 1.37% in the June quarter. Net Non-Performing Assets (NNPA) also declined to 0.61% from 0.70%, while credit cost as a percentage of average AUM eased to 2.19% from 2.40%.
Brokerage's Take
Jefferies has maintained a 'buy' rating on the stock with a price target of Rs 560 after it noted the company's strong growth, profit beat, and margins suprise.
The brokerage said that the company's net profit was above estimates led by better Net Interest Margins, assets under management surged 55% year-on-year. NIMs rose on better yields. NIMs surprised the brokerage positively and it sees them improving despite rate hikes. Credit cost slid over 20 basis points sequentially.
Jefferies expects new product scale up to drive 40% AUM compound annual growth rate (CAGR) over FY27-28 and said that the gap between disbursement and book yields should lift NIM despite drag from rate hikes
However, it flagged that potential insurance cap may dent fee income, but better NIM, lower opex and credit costs should drive sharp profit growth and lift return on equity to 15% by FY28 (6% FY26).
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