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Informist, Friday, Jul. 17, 2026

 

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--Poonawalla Fincorp: Will expand into new states like Telangana, UP, MP 
--Poonawalla Fincorp: Will tap tier 2, tier 3 cities with focus on gold loans 
--CONTEXT: Comments by Poonawalla Fincorp mgmt in post-earnings analyst call 
--Poonawalla Fincorp: Credit cost to improve from hereon 
--Poonawalla Fincorp: Collection efficiency remains key focus area 
--Poonawalla Fincorp: See credit cost to improve from 2.4% for a few qtrs 
--Poonawalla Fincorp: Don't see need for further fundraising in FY27 as of now 
--Poonawalla Fincorp: Fair to remain watchful of macro situation 
--Poonawalla Fincorp: Don't see write-offs going up incrementally 
--Poonawalla Fincorp: Will be able to contain NIM on better pdt mix 
--Poonawalla Fincorp: Will be able to contain NIM despite high borrow cost 

 

By Priyasmita Dutta and Kabir Sharma

 

MUMBAI/NEW DELHI – Poonawalla Fincorp Ltd. expects its credit costs to continue improving over the next few quarters as better customer selection and stronger collections feed through to asset quality, while the non-banking finance company plans to expand its footprint into new states and deepen its presence in smaller cities through its gold loan business, the senior management said in a post-earnings analyst call.

 

The company said the quarterly credit cost, which moderated to 2.4% in the Apr-Jun quarter from 2.51% in the preceding three months and 2.62% in the December quarter, is expected to decline further. "Credit cost is presently declining, but it's reached 2.4%. We see that structurally improving quarter on quarter for a couple of quarters," Managing Director Arvind Kapil said. "That confidence of our customer cohorts and our collection strength is giving us a fair amount of confidence."

 

The management attributed the expected improvement to disciplined underwriting, better portfolio calibration, stronger collection performance and the increasing contribution of lower-risk customer segments and secured products.

 

The company also indicated that collection efficiency will remain a key operating priority as it seeks to sustain the improvement in asset quality. The management highlighted that current bucket flow improved 15% sequentially during the quarter, while stage-I and stage-III slippage ratios declined 5% and 13%, respectively, helped by tighter portfolio calibration and stronger collections.

 

On write-offs, the management said it does not expect any meaningful increase from current levels, indicating that quarterly write-offs have largely stabilised after legacy issues were addressed. Growth, meanwhile, will be supported by geographic expansion and new product penetration. The company said it plans to enter new states such as Telangana, Uttar Pradesh and Madhya Pradesh while focusing on tier-II and tier-III cities through its fast-growing gold loan franchise.

 

Kapil said the gold loan business has scaled up rapidly, with around 400 branches launched and another 60 added in the current financial year, while indicating that expansion could exceed the initial target depending on business momentum. The company expects the secured lending portfolio to remain a key growth driver alongside prime personal loans, education loans and consumer durable financing.

 

On margins, the management said it remains confident of protecting net interest margins despite elevated borrowing costs, aided by improving product mix and rising disbursement yields. Kapil said disbursement yields have increased by around 50 basis points during the latest quarter after improving about 40 basis points in the preceding quarter. While the cost of borrowing has edged up, the management said the increase is not material enough to offset the benefit from improving portfolio yields. 

 

The company also ruled out any immediate need to raise fresh capital during the current financial year after completing an INR 25 billion qualified institutional placement in April. "We are pretty much comfortable for the four quarters to five quarters," Kapil said.

 

Despite expressing confidence in the business outlook, the management said it would continue to monitor the broader macroeconomic environment closely. "It is fair to be very, very watchful of the macro indicators," Kapil said, adding that the company would not hesitate to moderate growth in specific products if risk conditions warranted such action.

 

For the June quarter, the non-banking finance company reported a consolidated net profit of INR 3.08 billion, compared to INR 626 million for the year-ago quarter. On Friday, shares of Poonawalla Fincorp ended at INR 477.30 on the NSE, up 1.1% over Thursday.  End

 

Edited by Avishek Dutta

 

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