Poonawalla Fincorp shares jump 5% after strong Q1 updates; stock hits new 52-wk high

Shares of Poonawalla Fincorp surged about 5 per cent during the trading session on Wednesday after the company reported a strong business update for the quarter ended on June 30, 2023. Following the announcement, shares of the shadow lender hit its new 52-week high.

The company recorded its highest ever disbursements during the period. The total disbursements during the first quarter of the ongoing financial year were Rs 7,050 crore, up 143 per cent on a year-on-year (YoY) basis and 11 per cent on quarter-on-quarter (QoQ) basis, Poonawalla Fincorp said in the exchange filing.

Direct digital program (DDP) continued a healthy trajectory, contributing 86 per cent of the total disbursements in April-June 2024 compared to 81 per cent in Q4FY23, 66 per cent in Q3FY23, 54 per cent in Q2FY23 and 32 per cent in Q1FY23, the filing said further.

Shares of Poonawalla Fincorp surged about 5 per cent to Rs 375.80, its new 52-week high, on Tuesday, before giving up its gains partially. The company was commanding a total market capitalisation of close to Rs 29,000 crore. The scrip had settled at Rs 358.75 on Tuesday.

Shares of Poonawalla Fincorp have surged more than 65 per cent in the last one year, while the stock has surged almost 30 per cent in the last six months. The stock has delivered a whopping 2,700 per cent return from its Covid-19 lows at Rs 13.35 in May 2020.

Poonawalla Fincorp, formerly known as Magma Fincorp, is a non-banking financial company (NBFC) that is engaged in consumer and MSME financing. It is headquartered in Pune and part of the Poonawalla Group. The company was incorporated in 1988, but was taken over by a major financial investment by Rising Sun Holdings, an Adar Poonawalla controlled company, in February 2021.

Assets under management (AUM) of Poonawalla Fincorp grew by 41 per cent YoY and 10 per cent QoQ to Rs 17,770 crore as on 30 June 2023, the company said. "The Company continues to have ample liquidity of approximately Rs 4,000 crore as of the given quarter," said the filing.

Gross non-performing assets (GNPA) and net non-performing assets (NNPA) are expected to improve further, the company said. "As guided, we would strive to maintain the NNPA below 1 per cent, in line with management vision for 2025," it added.

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