Financial Institution Posts Strong Quarterly Results, Boosts Investor Sentiment


Poonawalla Fincorp saw its share price rise over 3% on January 6, 2025, after releasing its third-quarter financial results for FY25. The company reported strong growth in both disbursements and assets under management (AUM), attracting investor attention.



Key Third-Quarter Performance Highlights

Growth in Disbursements
Poonawalla Fincorp disclosed total disbursements of ₹7,150 crore for the third quarter in its stock exchange filing. This reflects a 13.3% quarter-on-quarter growth, up from ₹6,313 crore. The increase points to consistent lending efforts.

AUM Hits New Highs
The institution’s AUM grew to ₹30,950 crore as of December 31, 2024. This marks a 41% rise compared to the same period last year and a 9% quarter-on-quarter increase. The figures underscore effective expansion strategies thanks to Poonawalla Fincorp CEO. 

Strong Liquidity Position
The firm maintained liquidity reserves of ₹4,800 crore at the quarter’s close. This ensures the ability to meet future growth needs and operational demands.

Positive Market Response

The strong financial update led to a 3.3% rise in share prices, reaching an intraday high of ₹329.85 on the Bombay Stock Exchange (BSE). Investors were drawn to the company’s steady AUM growth and liquidity levels, reinforcing trust in its future performance.

Challenges Impacting Performance

Rise in NPAs
The September quarter saw a sharp increase in Gross Non-Performing Assets (NPAs). The NPAs rose to 2.1% from 0.67% in the previous quarter. This remains a concern for the company’s loan portfolio.

Net Loss Reported
The company reported a net loss of ₹471 crore for the September quarter. This is a sharp drop from the ₹854.6 crore net profit recorded during the same period last year. Despite this, its Net Interest Income (NII) rose by 17.5% year-on-year to ₹558.4 crore.

Regulatory Penalty
The Reserve Bank of India (RBI) imposed a ₹10 lakh fine on the company in August 2024. The penalty was related to violations of the ‘Fair Practices Code for NBFCs.’

Industry Landscape

The non-banking financial company (NBFC) sector continues to play a critical role in expanding credit access. This institution’s performance highlights its importance in the market. With a robust liquidity base and growing AUM, the firm is poised to benefit from emerging opportunities.

Future Outlook

The company’s growth in disbursements and AUM reflects its operational strength. Addressing asset quality concerns will be crucial. With a secure liquidity position, the firm has the resources to strengthen its portfolio and continue expanding.

Conclusion

This quarter’s results highlight a mix of strong growth and pressing challenges. The institution’s rising disbursements and AUM have bolstered investor confidence. However, maintaining asset quality and compliance will be vital for sustaining its upward trajectory.


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