Poonawalla Fincorp shares slide despite strong Q1 results; analysts turn bullish
AI Summary
Poonawalla Fincorp shares fell 1.18% to ₹471.65 despite strong Q1FY27 results, with analysts maintaining positive outlooks. Motilal Oswal set a target price of ₹570, while JM Financial upgraded its target to ₹530, citing improving margins and asset quality. The company's robust growth metrics indicate potential for future gains, even as sell orders dominate the current trading session.
Shares of Poonawalla Fincorp were trading lower on Monday morning, down 1.18 per cent at ₹471.65 as of 10.30 AM, after opening higher at ₹489 before pulling back.
The stock touched an intraday low of ₹466.10, with sell orders dominating at nearly 79 per cent of total order quantity. Market cap stands at approximately ₹41,538 crore.
The weakness comes despite the non-banking financial company reporting a strong set of numbers on Thursday. Sell-side analysts, however, are broadly upbeat on the stock’s prospects.
Motilal Oswal Financial Services reiterated its Buy rating with a target price of ₹570, implying an upside of around 19 per cent from Friday’s close of ₹477.30.
The brokerage modelled a 43 per cent AUM CAGR and 116 per cent PAT CAGR over FY26–FY28, expecting the company to deliver a return on assets of 2.4 per cent and return on equity of around 16 per cent by FY28.
JM Financial went a step further, upgrading the stock to ADD from Reduce, raising its target price to ₹530 from ₹410. Analyst Pratik Matkar cited improving margins, declining credit costs and better operating efficiency as reasons for the upgrade, factoring in earnings upgrades of roughly 9 per cent and 6 per cent for FY27 and FY28 respectively.
Both brokerages pointed to Poonawalla Fincorp’s Q1FY27 results as evidence of a strengthening business. Profit after tax rose 20.8 per cent quarter-on-quarter to ₹308 crore, while pre-provision operating profit expanded 12.9 per cent QoQ to ₹785 crore. Assets under management grew 62.5 per cent year-on-year and 11.1 per cent QoQ to ₹67,054 crore.
Asset quality showed improvement, with gross NPA declining 7 basis points sequentially to 1.37 per cent, with management confirming no accelerated write-offs during the quarter.
Net interest income, including fees and other income, rose 84.3 per cent year-on-year to ₹1,415 crore. Return on assets improved to 1.98 per cent, up 17 basis points QoQ.
New product lines, including Gold Loans, Consumer Durable Loans, Education Loans, Commercial Vehicle Loans and Prime Personal Loans, contributed 26 per cent of total disbursements in Q1FY27. Gold loan branches expanded to 460, with management guiding for approximately 400 additional branches in FY27.
The stock’s 52-week high stands at ₹570.40, hit in October 2025, while its 52-week low was ₹361.20 in March 2026. The current P/E stood at 53.41.
Original Article
Published on Hindu BusinessLine