Poonawalla Fincorp soars with record 52% AUM growth – What’s driving the surge?

Poonawalla Fincorp Limited, a leading non-deposit taking systemically important non-banking financial company (ND-SI-NBFC) specializing in consumer and MSME finance, today unveiled its unaudited financial results for the first quarter ended June 30, 2024. Demonstrating robust growth, the company reported a significant 52% year-over-year increase in Assets Under Management (AUM), which now stands at ₹26,972 crore.

During Q1FY25, Poonawalla Fincorp continued to enhance its market position by achieving substantial growth in AUM and profitability, backed by superior asset quality and strategic customer engagement. The AUM mix includes 35% in MSME finance, followed by 28% in personal and consumer finance, highlighting the company’s diversified portfolio.

Key Financial Highlights:

– Assets Under Management (AUM): Increased to ₹26,972 crore, up by 52% from the previous year and 8% from the previous quarter.

– Profitability: The Pre-Provision Operating Profit (PPOP) reached ₹432 crore, marking a 47% increase year-over-year. Meanwhile, Profit After Tax (PAT) surged by 46% to ₹292 crore.

– Asset Quality: Demonstrated improvement with Gross Non-Performing Assets (NPA) at 0.67% and Net NPA at 0.32%, showcasing lower risk and high credit quality.

– Capital Adequacy and Liquidity: Maintained a strong Capital Adequacy Ratio of 31.57%, with Tier-1 capital at 30.09%, significantly above the regulatory requirement.

Arvind Kapil, Managing Director and CEO of Poonawalla Fincorp, commented on the results, stating, “Our fundamental guiding philosophy for all businesses will be productivity, predictability, and sustainability. We envisage achieving it through higher investments mainly in collections, technology, and the launch of new businesses. This strategic approach will help us build a retail franchise step-by-step, process-by-process with solid risk management and a mix of the right products.”

Poonawalla Fincorp’s impressive quarterly results reflect its strategic focus on high-growth sectors and commitment to maintaining robust financial health. The company’s prudent management and diversified business model are key drivers behind its strong performance, positioning it well for sustainable growth in the competitive finance sector.

As Poonawalla Fincorp Limited progresses through the fiscal year, its focus on expanding its consumer and MSME financing capabilities, coupled with strategic investments in technology and new business initiatives, is expected to continue driving its growth trajectory. The company’s robust financial performance in Q1FY25 sets a positive tone for its operations and market presence in the upcoming quarters.