Poonawalla Fincorp (POONAWALLA) Q2 24/25 earnings summary

Executive summary

• Achieved 40% year-over-year AUM growth to ₹28,396 Cr, with a balanced secured/unsecured mix at 51:49 and 5% sequential growth.

• Net Interest Income grew 22% YoY to ₹645 Cr, but declined 5% QoQ; PPoP at ₹279 Cr, down 17% YoY but up 35% QoQ due to one-time Opex and ongoing investments.

• PAT reported a consolidated net loss of ₹471.04 crore in Q2 FY25, impacted by a one-time provisioning of ₹666 Cr for the STPL portfolio and a one-time Opex of ₹71 Cr.

• Significant investments are being made in people, technology, and new business lines, with a strong management team largely in place.

• The company is expanding its product portfolio from 4 to 10 offerings, including gold loans, education loans, and consumer durables, to drive growth and diversification.

Financial highlights

• AUM reached ₹28,396 Cr (+40% YoY, +5% QoQ); secured mix improved by 225 bps QoQ.

• NII at ₹645 Cr (+22% YoY, -5% QoQ); cost-to-income ratio at 36.1% (adjusted for one-time Opex).

• PPoP at ₹279 Cr (-17% YoY, +35% QoQ); PAT at -₹471 Cr due to one-time items.

• Liquidity of ₹5,710 Cr as of Sep 30, 2024.

• Revenue from operations for Q2 FY25 was ₹988.87 crore, up from ₹738.11 crore in Q2 FY24.

Outlook and guidance

• Management expects 30–40% AUM growth annually for the next five years, with recalibrated risk and a focus on sustainable profitability.

• Ongoing Opex investments of ~₹50 Cr per quarter for the next 6 quarters to build 6 new businesses.

• No immediate need for equity raise; ample headroom for leverage with a debt-to-equity ratio of 2.26 and high capital adequacy.

• Focus on expanding 'phygital' distribution, cross-selling, and AI-driven customer engagement.

• Board reaffirmed plan to sell stake in joint venture Jaguar Advisory Services Private Limited, subject to regulatory approvals.