29 Oct , 2021 By : Kanchan Joshi
Shares of Poonawalla Fincorp have surged from Rs40 per share level in January early year to over currently trading over Rs160 level currently as the multibagger stock has skyrocketed more than 300% this year (year-to-date). Brokerage firm ICICI Securities sees further upside on the stock after its second quarter results.
The company reported better-than-expected net profit which grew 151% on a yearly basis. As per ICICI Securities, the earnings beat was primarily led by credit cost being contained sub-1% at Rs340 million.
“Business transformation is clearly underway with leadership team being strengthened, credit policies being revised and risk management, data analytics and digital capabilities being scaled up," the brokerage said in a note. It has maintained Buy rating on the stock with a target price of Rs265 apiece.
The brokerage further highlighted that the company enjoyed two notch rating upgrade in long-term credit rating to ‘AA Stable’ by Care Ratings. Poonawalla Fincorp's net interest margins (NIMs) expanded to 9.1% during the second quarter ended September.
“PFL is looking to expand its tech capabilities through a dedicated technology centre in Pune. It is setting up a strong analytics team, focused on delivering targeted value proposition to customers and generating cross-sell opportunities. It will follow the ‘digital first’ approach across the organisation to get speed, control, scale and operational efficiency," the note added.
Poonawalla Fincorp, earlier known as Magma Fincorp, is a Poonawalla group non-banking finance company (NBFC) that focuses on consumer and MSME financing. Adar Poonawalla is the chairman of Poonawalla Fincorp. Magma in July had announced that it has changed its name to Poonawalla Fincorp Limited effective 22 July, 2021, following the acquisition of controlling stake by Adar Poonawalla-led Rising Sun Holdings Private Limited.
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