Poonawalla Fincorp. is in focus as UBS Securities India Private Limited (UBS) initiated coverage on the consumer lending company. The brokerage has assigned a 'buy' rating and setting a target price of Rs 640, citing the company's strengthening franchise and growth outlook. Currently the stock is trading at Rs 460 which shows an upside of 39% from Wednesday's close.
The brokerage says that Poonawalla Fincorp is supported by strong management quality and the promoter group's credibility. One of the key differentiators for the non‑banking finance company (NBFC) is its AAA credit rating, which is relatively rare in the sector. This rating, driven by promoter support and disciplined risk management, provides the company with access to low‑cost funding.
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The brokerage expects Loan Against Property (LAP) and gold loans to emerge as the company's anchor products over the next few years, enabling steady asset growth and portfolio diversification.
UBS projects that Poonawalla Fincorp's Return on Assets (ROA) will reach 2% by FY28E, supported by stable margins, improved operating leverage, and disciplined cost management.
UBS believes Poonawalla Fincorp is well‑positioned to scale profitably, backed by prudent management, a clean balance sheet, and a focused product strategy.
Out of nine analysts tracking the company, four maintain a 'buy' rating while one maintains a "hold" and four maintain "sell" rating, according to Bloomberg data. The average 12-month consensus price target of Rs 517.63 implies an upside of 12.3%.
Poonawalla Fincorp Limited is a Cyrus Poonawalla group Non-Banking Finance Company (NBFC) that focuses on consumer and MSME financing offering diversified product suite to address the financing needs of their customers and enterprises.
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