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Informist, Tuesday, Jan. 13, 2026

 

By Eshitva Prakash

 

MUMBAI – Poonawalla Fincorp Ltd. is expected to report an eight-fold increase on year in its consolidated net profit for the December quarter on the back of lower credit costs and improving asset quality, according to brokerages tracking the company. Its net interest income is seen surging on year due to hefty growth of assets under its management and higher loan disbursements. A broad-based traction across secured and unsecured loan portfolios and new product launches are expected to boost the company's AUM growth, brokerages said.

 

The non-banking finance company's consolidated net profit for the December quarter is estimated at INR 1.47 billion, according to an average of estimates from five brokerages. This estimate implies the company's net profit would almost double on quarter. For the September quarter, the company had reported a consolidated net profit of INR 742 million and in the year-ago quarter, the company had reported a bottom line of INR 187.30 million.

 

This projection also implies a sharp on-quarter acceleration in bottom line growth for the company, which had reported an 18.5% sequential rise in the metric in the trailing quarter. The highest estimate for the company's net profit is INR 2.13 billion by Nirmal Bang Equities Pvt. Ltd. while the lowest estimate is INR 995 million by JM Financial Institutional Securities Pvt. Ltd.

 

The company's consolidated net interest income for the December quarter is estimated at INR 9.05 billion, up over 47% on year and up slightly more than 18% on quarter, according to an average of estimates by five brokerages. The highest estimate for the company's net interest income is INR 10.41 billion by Emkay Global Financial Services while the lowest estimate is INR 8.23 billion by ICICI Securities Ltd.

 

The company's net profit is likely to surge due to lower credit costs and improving asset quality, according to brokerages. Motilal Oswal expects a near 60 basis points on-quarter reduction in credit costs to 2.2% and sees the company's cost-to-income ratio declining to 50.8% sequentially compared to 57.3% in the previous quarter. A lower cost-to-income ratio shows strong operational efficiency and tighter cost management.

 

The latest 25 bps repo rate cut in December, which was in addition to the 100 bps repo rate cuts in 2025, will support a decline in cost of funds, ICICI Securities said about non-banking finance companies.

 

Poonawalla Fincorp said its provisional assets under management grew 77.5% on year and over 15% on quarter to around INR 550 billion as on Dec. 31. The company's AUM is expected to expand on the back of broad-based traction across secured and unsecured portfolios, new product launches including gold loans and education loans, and sustained customer acquisition momentum across digital and physical channels, DR Choksey FinServ Pvt. Ltd. said.

 

Brokerages were divided in their opinion about the company's net interest margin for the December quarter. JM Financial sees an 8 bps sequential rise in the company's NIM, while Nirmal Bang expects a 9 bps decline. ICICI Securities sees the company's NIM declining 31 bps on quarter to 6.6%. JM Financial's net profit estimate is the lowest for the company among other brokerages, despite the anticipated rise in NIM and Nirmal Bang's PAT estimate is the highest despite the brokerage expecting a decline in the company's NIM.

 

The company's net interest margin for the September quarter was 8.4%. The company maintains its target of normalised net interest margins near 9% over the next few quarters, supported by improved yield mix and lower cost of borrowing, DR Choksey said.

 

Poonawalla Fincorp is a part of the Cyrus Poonawalla group which also owns the vaccine maker Serum Institute of India. The non-banking finance company focusses on financing consumer loans and loans to micro, small, and medium enterprises. Management commentary on growth of personal loans, margin and asset quality, and credit costs will be key to determine the company's growth trajectory going forward, according to brokerages. The company will report its December quarter earnings Friday.

 

On Tuesday, shares of Poonawalla Fincorp ended over 2% higher at INR 461.15 on the National Stock Exchange. The stock is down almost 10% since the company reported its earnings for the September quarter.

 

Of the eight research reports on the company available with Informist, five have a 'buy' or an equivalent recommendation, two brokerages have a 'sell' and another has a 'hold' recommendation. The average target price for the 'buy' recommendations is INR 527, which is over 14% higher than the current market price.

 

Following are the Oct-Dec earnings estimates for Poonawalla Fincorp from five brokerages in descending order of net profit, in INR million:

 

Brokerages	NII	Net Profit
Nirmal Bang Equities Pvt. Ltd.	8,674	2,126
Motilal Oswal Financial Services Ltd.	8,995	1,891
ICICI Securities Ltd.	8,230	1,279
Emkay Global Financial Services Ltd.	10,413	1,038
JM Financial Institutional Securities Pvt. Ltd.	8,925	995
Average	9,047.40	1,465.80

 

End

 

Edited by Ashish Shirke

 

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