Poonawalla Fincorp (POONAWALLA) Q4 24/25 earnings summary

Executive summary

• Achieved AUM growth of 43% year-on-year, reaching ₹35,631 crore as of March 31, 2025, with robust momentum across all product lines and six new business launches, including gold loans, commercial vehicle loans, education loans, consumer durables, and shopkeeper loans.

• Emphasized a risk-first approach, leveraging advanced AI and digital journeys for underwriting, collections, and customer engagement, driving operational efficiency and asset quality.

• Consolidated net profit after tax for FY25 was ₹1,683.06 crore, a significant turnaround from a loss of ₹98.34 crore in FY24, driven by higher interest income and a one-time gain from sale of subsidiary.

• Total income for FY25 rose to ₹4,222.84 crore from ₹3,147.33 crore in FY24, reflecting robust growth in core lending operations.

Financial highlights

• Net interest income for FY25 was ₹2,708 crore, up 23% year-on-year; Q4FY25 NII at ₹715 crore, up 12% year-on-year.

• Profit after tax for Q4FY25 was ₹62 crore, up from ₹19 crore in Q3 FY25; FY25 PAT impacted by one-time opex and accelerated provisioning, but consolidated net profit for FY25 was ₹1,683.06 crore due to a one-time gain from a subsidiary sale.

• Pre-provisioning operating profit (PPOP) for FY25 was ₹1,417 crore, up 2% year-on-year; Q4 PPOP was ₹333 crore, down from Q3 due to investments in new businesses.

• Credit costs reduced by 27% quarter-on-quarter to ₹253 crore; full-year write-offs totaled ₹1,548 crore.

• OpEx to average AUM was 4.8% for Q4 and 4.6% for FY25, with expectations to decline as scale and efficiencies improve.

Outlook and guidance

• Confident in sustaining robust AUM growth and profitability, with guidance reaffirmed for FY26 and FY27 and aspirations for 5-6x AUM growth over the next five years.

• Operating costs expected to remain elevated for two more quarters due to business launches and branch expansion, then decline as efficiencies are realized.

• ROA targeted at 3–3.5% over the next three years, with all new AUM constructed at 3%+ ROA.

• No accelerated write-offs expected in coming quarters; credit costs anticipated to stabilize as risk recalibration matures.

• Continued investment in digital, AI, and branch expansion to drive future growth.