Check Before You Invest : Poonawalla Fincorp Ltd

BSE: 524000 NSE: POONAWALLA ISIN: INE511C01022

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does Poonawalla Fincorp Ltd belong to?

Poonawalla Fincorp Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.

Q.2 Is Poonawalla Fincorp Ltd a good quality company?

Poonawalla Fincorp Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is Poonawalla Fincorp Ltd undervalued or overvalued?

Poonawalla Fincorp Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Poonawalla Fincorp Ltd a good buy now?

Poonawalla Fincorp Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Poonawalla Fincorp Ltd?

Poonawalla Fincorp Ltd Operating Income growth is 34.57% for FY-2025, which is above its 5-year CAGR of 13.98%, indicating faster growth.

Q.2 Return on Assets of Poonawalla Fincorp Ltd?

Poonawalla Fincorp Ltd Return on Asset is -0.3%, which is below its 5-year historical median of 2.6%, indicating deteriorated earnings on assets.

	Current Level	5-year Historic Median
NPM%	-2.35	19.09
PPOP%	-53.65	11.96
RoA%	-0.3	2.6

Q.3 Return on Equity (ROE) of Poonawalla Fincorp Ltd?

Poonawalla Fincorp Ltd Return on Equity is -1.2% for FY-2025, which is below its 5-year historical median of 7.7%, indicating the business is making worse use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Poonawalla Fincorp Ltd?

Poonawalla Fincorp Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is -53.65% for FY-2025, which is below its 5-year median(11.96%), indicating decreasing margins.

Q.5 Net Profit Margin of Poonawalla Fincorp Ltd?

Poonawalla Fincorp Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is -2.35% for FY-2025, which is below its 5-year median( 19.09%), indicating decreasing margins.

Q.6 Total Asset growth of Poonawalla Fincorp Ltd?

Poonawalla Fincorp Ltd Total Asset growth is 45.66% for FY-2025, which is above its 5-year CAGR of 22.03%, indicating faster growth.

Q.7 Capital Adequacy ratio of Poonawalla Fincorp Ltd?

Poonawalla Fincorp Ltd Capital Adequacy ratio (CAR) is 22.94% for FY-2025, which is above the regulatory requirement of 15%, indicating strong capital position.

Q.8 Asset Quality of Poonawalla Fincorp Ltd?

Poonawalla Fincorp Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 1.84% for FY-2025, which is below its 5-year median 4.8%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.85% which is in line with its 5-year median( 0.85%), indicating stable asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Poonawalla Fincorp Ltd?

Promoters hold 63.93% of the Poonawalla Fincorp Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Poonawalla Fincorp Ltd vs Industry Peers?

Poonawalla Fincorp Ltd AUM CAGR is 22.03%, compared to the 5-year industry median CAGR of 15.99%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Poonawalla Fincorp Ltd vs industry peers

Poonawalla Fincorp Ltd profit metrics are in line with the industry median level of 9.53%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	-2.35	13.77
PPOP%	-53.65	12.76
RoA%	-0.3	2.05

Q.3 Operating efficiency of Poonawalla Fincorp Ltd vs industry peers?

Poonawalla Fincorp Ltd ROCE (8) is below the industry median of (9.05); while the current ROE (7.7) are below than the 5-year average Industry ROE (12.85). This shows that the business is positioned in the bottom quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	-2.35	13.77
PPOP%	-53.65	12.76
RoA%	-0.3	2.05
ROCE%	4.8	9.05
ROE%	-1.2	12.85

Valuation & price assessment

Q.1 Stock return of Poonawalla Fincorp Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 15.8% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	15.8%	28.6%	8.9%	10.3%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	105.08	50.09	28.96
Price to Book	2.94	3.73	1.11
Price to Sales	6.3	10.76	9.10
EV to EBITDA	21.35	26.24	11.77

Q.4 Valuation ratios of Poonawalla Fincorp Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 2.94% is lower than its historical median of 3.73%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Poonawalla Fincorp Ltd return on invested capital (ROIC) is 3.36% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value erosion.

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