Poonawalla Fincorp shares zoom 67% in 4 months; should you buy, sell or hold?

Shares of Poonawalla Fincorp surged as much as 8 per cent during the trading session on Monday after the company announced its quarterly earnings on Friday. The mixed set of numbers have left analysts divided on the stock, with some suggesting to 'buy' it while others suggest to 'sell' the counter.  

Poonawalla Fincorp Q1 results

The Pune-based NBFC reported a sharp 78 per cent fall in the net profit on a year-on-year (YoY) basis to Rs 63 crore, impacted by higher expenses and provisioning. The shadow lender's net interest income (NIIs) came in at Rs 639 crore, up nearly 11 per cent on a YoY basis.

Poonwalla's assets under management (AUM) rose 53 per cent YoY to Rs 41,273 crore in June 2025, driven by strong performance across all product segments. Credit cost dropped significantly to 2.61 per cent in AUM terms. Asset quality remained stable in Q1FY26, with gross NPA steady at 1.84 per cent and net NPA unchanged at 0.85 per cent for the quarter.

A Rs 1,500 crore growth capital by promoters - among the largest in recent times - will push the net worth of the company close to Rs 10,000 crore. The proposed capital infusion would sustain high growth for this financial year and the NBFC would look at another round of equity raise may be early next financial year.

Stock price movement

Shares of Poonawalla Fincorp surged more than 7.6 per cent during the trading session on Monday to Rs 444.95, commanding a total market capitalization of more than 34,000 crore. The stock had settled at Rs 413.50 on Friday. The stock has gained nearly 40 per cent in the last six months period, which has zoomed nearly 67 per cent from its 52-week low at Rs 267.25 hit in April 2025.

Brokerage views

Poonawalla Fincorp’s 1QFY26 performance was below estimates with NII/PPOP coming in at a variation of -7 per cent/-16 per cent. PAT came below estimates by -60 per cent due to significant increase in provisions YoY, said Nirmal Bang Institutional Equities. Asset quality witnessed stability during the quarter, primarily driven by effective resolution of the erstwhile STPL portfolio, it said.

"Poonawalla is leveraging AI-led digital journeys alongside an aggressive branch rollout to scale up the gold loans and the consumer businesses. We remain watchful of the credit cost trend going forward and factor in elevated opex to support new verticals. We roll forward our valuation to June 27E ABV with a multiple of 3.3 times, giving a target price of Rs 376," it added with a 'sell' rating.

Poonawalla Fincorp reported another strong quarter in terms of growth, while credit cost remains elevated and margins remain soft, dragged down by the STPL book, which now forms only 4 per cent of the overall portfolio. The management maintains its growth guidance of 35-40 per cent and NIM hitting 9 per cent levels in the next 3-4 quarters, said Emkay Global Financial Services.

"The management also highlighted that it is leveraging tech and AI across business functions which would result in operational efficiency and thus in opex moderation as projects are implemented. Given the high opex and the unseasoned book, asset quality and profitability still hinge on trust in management," it added with a 'reduce' rating and a target price of Rs 310 apiece.

Led by strong AUM growth, Poonawalla Fincorp's Q1FY26 PPoP surged 36 per cent QoQ to Rs 320 crore. A marquee management team, with risk precision and strong tech capability will likely drive one of the fastest growths in listed NBFCs, a 44 per cent AUM CAGR over FY25-28, said Anand Rathi Shares & Stock Brokers.

"Capital infusion by the promoter will further enhance growth prospects for the NBFC. We retain a 'buy' with a higher target of Rs 555, valuing the company at 3.7 times September 27e P/BV," it added. However, the brokerage has cited higher slippages, less-than-expected loan growth.