Poonawalla Fincorp shares may rise, experts give 'BUY' rating
• ICICI Securities gives a target of Rs. 335/- with a BUY rating
Poonawalla Fincorp Share, the finance services company of the Poonawalla Group, has given amazing returns to its investors. After the excellent quarterly results, experts are bullish on this stock and are advising to buy it. According to market expert brokerage House ICICI Securities, the stock can reach Rs. 335/- and Nirmal Bang has given it a BUY rating with a target price of Rs. 314/-. The company made a profit.
Poonawala Fincorp registered a growth of Rs. 141/- crore in the April-June quarter (Q1FY23) with a 118% increase in consolidated net profit on strong debt disbursements and better margins. The income in the reporting quarter rose to ₹572 crore, from ₹483 crore in the previous-year period. We would like to inform you that the merger with Poonawalla Fincorp and Magma Fincorp has completed one year.
According to ICICI Securities, the company's recently launched product segment as well as the direct, digital and partnership (DDP) based distribution platform gained massive popularity, and the company launched new products and focused on a 34% increase in AUM for FY23E/FY24E with cross-sale/up-sale. In FY2023, the management has guided RoA of 3.0-3.5%, RoAs with stable position of 3.5-4.0% with retaining NIMs and containing credit costs at <1%, in which the gross stage-3 pool is below 2% and net stage-3 is intact at <1%.
ICICI Securities in its report said that, "We are confident that faster implementation of the business, better market positioning in focused product segments, growth in business through diversified and diverse portfolio mix and sustained income distribution will give a boost to re-pricing." Further, the proposed preferential issue of up to Rs. 10 billion in Poonawalla Housing Finance for <15% dilution will add to the importance of its top-ranked credit rating (AA+ positive) affordable housing franchisee at the all-India level. With a portfolio suitable for growth and a >3% RoA profile, in FY24E's consolidated book this stock can achieve a valuation of 3.5 times (compared to the previous expected 2.75 times). We have changed our target price to Rs. 335/- (from Rs. 261/- earlier). BUY position is intact. “