"We raise our FY27/FY28 EPS estimates by ~3% each to factor in slightly higher NIM (driven by stronger expansion in yields). The stock currently trades at 2.3x FY28E P/BV. We model 44% AUM CAGR and 120% PAT CAGR over FY26-FY28E and expect Poonawalla Fincorp to deliver RoA/RoE of 2.4%/~17% in FY28E. Reiterate our BUY rating with a TP of Rs 570 (based on 2.7x Sep’28E BVPS)," said MOFSL.
The company reported its Q2 earnings on October 9. Net profit rose 405% in the September 2026 quarter. The NBFC reported a profit of Rs 374.85 crore in Q2 against a profit of Rs 74.20 crore in the year ago period. The NBFC reported a revenue growth of 70.17% YoY at Rs 2624.50 crore in the last quarter against Rs 1542.30 crore in the corresponding period of the previous fiscal.
Poonawalla Fincorp reported assets under management (AUM) of Rs 74,008 crore. Returns on assets (RoA) strengthened to 2.18%. Net interest income (NII) grew by 12.3% QoQ to Rs 1,589 crore during the quarter. Net Interest Margins (NIMs) came at 9.26% in Q2FY27.
Another brokerage Nirmal Bang has an upside of 7% on the stock. Poonawalla Fincorp delivered a strong set of 2QFY27 numbers beating consensus PAT estimates by 11%, said Nirmal Bang. However, it has a hold stance on the stock.
"While the company has delivered rapid AUM expansion and an improving RoA of 2.18%, a substantial portion of the aggressively scaled book remains unseasoned, making multi-year vintage stability across newer product lines a critical watch factor. We continue to maintain our cautious stance and maintain HOLD with an unchanged TP of Rs 480," said Nirmal Bang.
Brokerage JM Financial has upgraded its stance to 'buy' from add post Q2 earnings. It has raised its price target to Rs 550 against the earlier target of Rs 530.
"Stock price has corrected 5–9% over the last one–two months leading to correction in current valuation to 2.2x of FY28E. The current multiple largely captures the growth opportunity, but it does not adequately reflect the potential improvement in return ratios and franchise quality, offering an attractive entry point. Factoring in margin expansion, improving operating efficiency and moderating credit costs, we are raising FY27/28 EPS estimates by ~3%/4% and increasing TP by 4% to Rs 550 (from Rs 530), valuing the stock at 2.7x FY28E BVPS. We upgrade the stock to BUY (from ADD)," said JM Financial.
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