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Nirmal Bang Report
Poonawalla Fincorp Ltd. Q4 FY24 performance was in line with our expectations, with net interest income/pre-provision operating profit coming in at a variation of plus 3.1%/+5.3%. Profit after tax saw a beat of 29.5% from our estimates on account of lower provisions.
Assets under management growth remained buoyant (55% YoY/ 14% QoQ) driven by a surge in disbursements; we build 38% in FY25E aided by new launches (co-branded credit card and EMI Card).
Asset quality saw sequential improvement and the Poonawalla Fincorp expects to maintain the long-term gross non-performing assets guidance of 1.3%- 1.8%.
Diversified growth, steady opex and strong asset quality performance are key positives. We make marginal changes to our FY25/FY26 estimates, factoring in lower yields due to a shift in portfolio mix.
Roll forward our valuation to March-2026 adjusted book value of Rs 131 with an unchanged target multiple of 3.7 times, giving us a target price of Rs 480. However, valuations are expensive. Maintain 'Accumulate'.
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