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Informist, Friday, Oct. 17, 2025

By Akshat Saksena

MUMBAI - Poonawalla Fincorp Ltd. is expected to report a profit in the September quarter compared to the loss it reported a year ago when it was burdened by a one-time provisioning on account of its small ticket personal loans book. Its net interest income is seen surging on year in the September quarter due to an increase in assets under management, which was driven by higher customer acquisition, strong disbursements, and entry into new segments, according to brokerages.

However, the margins of the company are expected to be under pressure due to elevated operating costs as the company is expanding its manpower and infrastructure. The company's shift towards the secured loan segment is also expected to keep the company's net interest margin under pressure, brokerages said.

The non-banking finance company's consolidated net profit for the September quarter is estimated at INR 875.17 million compared to a loss of INR 4.71 billion in the previous year, according to an average of estimates provided by six brokerages. This would mean an increase of nearly 40% on quarter. The highest estimate for the company's net profit is INR 1.35 billion by Emkay Global Financial Services Ltd. while the lowest estimate is INR 625 million by JM Financial Institutional Securities Pvt. Ltd.

The company's pre-provisioning operating profit is expected to rise on year but brokerages are divided as to the extent of the growth. Estimates for the growth of operating profit range from a 15% rise on year by JM Financial to a 52% rise on year by Emkay Global. The company's pre-provisioning operating profit was INR 2.84 billion in the corresponding quarter of the previous financial year.

The company's consolidated net interest income for the September quarter is estimated at INR 7.46 billion, up 33% on year and up 17% on quarter, according to an average of estimates by six brokerages. The highest estimate for the company's net interest income is INR 8.96 billion by Emkay Global while the lowest estimate is INR 6.79 billion by Motilal Oswal Financial Services Ltd.

The NBFC's assets under management are expected to rise 60-66% on year, with ICICI Securities Ltd. having the lowest estimate and Nirmal Bang Equities Pvt. Ltd. having the highest. Its assets under management were INR 283.96 billion on Sept. 30 last year. The growth in its assets under management is driven by a focus on customer acquisition, Nirmal Bang said in a report. The growth is also due to strong disbursements in existing and new product segments, according to Emkay Global.

JM Financial and ICICI Securities expect Poonawalla's net interest margin to contract to 6.7% and 6.6%, respectively. Nirmal Bang expects net interest margin to contract to 7.1%. According to brokerages, the company's net interest margin for the September quarter last year was 8.1-9.1%. Emkay Global expects the net interest margin along with fee income to contract to 8.1% from 9.3% a year ago. 

Margins are, however, expected to improve sequentially due to better disbursement in the higher-yield new segment and the moderation in cost of funds due to interest rate cuts, according to Emkay Global. "Poonawalla Fincorp continues to focus on acquiring newer business, and while initial traction remains positive, we expect only a marginal improvement in the asset quality," Nirmal Bang added. Brokerages expect credit costs of around 2% for the September quarter.

Poonawall Fincorp, part of the Cyrus Poonawalla group, is a non-banking finance company that focuses on consumer and micro, small, and medium enterprises financing. The company will announce its earnings Friday. Management commentary on growth in personal loans, margins, along with asset quality and credit costs are key aspects to be monitored, according to JM Financial.

At 1316 IST, shares of Poonawalla Fincorp traded nearly 2% lower at INR 529.40 on the National Stock Exchange. The stock is up over 27% since the company reported its earnings for the June quarter.

Of the seven research reports on the stock available with Informist, three have a "buy" rating, two have a "hold" rating and two have a sell rating. The average target price for the "buy" recommendations is INR 484.

Following are the Jul-Sept earnings estimates for Poonawalla Fincorp, in INR million, from six brokerages in descending order of net profit:

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Edited by Deepshikha Bhardwaj

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