Poonawalla Fincorp (POONAWALLA) Q1 24/25 earnings summary

Executive summary

• New MD & CEO Arvind Kapil, with 25+ years in banking, was appointed in June 2024 to lead long-term growth and innovation, supported by a seasoned management team.

• Achieved 52% year-over-year AUM growth to ₹26,972 crore in Q1FY25, with consistent expansion across product lines and strong operational efficiency.

• Consolidated total income for the quarter ended 30 June 2024 was ₹995.86 crore, up from ₹693.48 crore year-over-year.

• Profit after tax reached ₹292 crore, up 46% year-on-year, though sequentially lower due to a prior one-time tax benefit.

• Strategic focus is on building a predictable, sustainable, and productive business model, with upfront investments in collections, technology, and new business lines.

Financial highlights

• AUM reached ₹26,972 crore, up 52% year-on-year and 8% quarter-on-quarter.

• Net interest income (including fees) was ₹676 crore, up 42% year-on-year and 5% quarter-on-quarter.

• Pre-provisioning operating profit grew 47% year-on-year to ₹432 crore.

• Gross NPA improved to 0.67%, down 75 bps year-on-year; net NPA at 0.32%.

• ROA at 4.62% and CRAR at 31.57%, with Tier 1 capital at 30.09%.

Outlook and guidance

• AUM growth guidance of 30%-35% for FY25 and 35%-40% annually for the next five years, aiming for 5-6x AUM growth over 5-6 years.

• Profitability expected to stabilize and mirror AUM growth from the third year onward, following upfront investments.

• Plans to launch new products (Consumer Durable, PL Prime, Shopkeeper Loans, Used CVs) and expand the phygital model.

• Emphasis on AI-led digital strategy, data analytics, and customer engagement to drive future growth.

• The company reaffirmed its plan to sell its shareholding in Jaguar Advisory Services Private Limited, subject to regulatory approvals.