ICICI Securities upgrades Poonawalla Fincorp to 'Buy'; shares up 16%
Premium- Shares of Poonawalla Fincorp rallied nearly 16% to ₹250 apiece on the BSE in Friday's session
Shares of Poonawalla Fincorp rallied nearly 16% to ₹250 apiece on the BSE in Friday's session after the company said its assets under management (AUM) for FY22 increased to ₹16,579 crore, recording a growth of 17% over FY21 while disbursements grew by 158% over FY21.
Its consolidated profit before tax for FY22 stood at ₹492 crore against a loss of ₹749 crore in FY21. Net profit for FY22 came at ₹375 crore. Its net interest margin (NIM) increased by 65 bps year-on-year (YoY) to 8.9%.
“For Poonawalla Fincorp (PFL), FY22 was a defining year with consolidation as well as business transformation strategy underway. In this transitioning phase, it has delivered on its stated strategy and exited FY22," brokerage ICICI Securities said in a note.
The brokerage house has upgraded Poonawalla Fincorp shares' rating to Buy from Reduce with a revised target price of ₹261 apiece from ₹214 earlier.
“We believe re-rating will be triggered by sharp business execution, improved market positioning in focused product segments, business scale up through diversified and granular portfolio mix and consistent earnings delivery," it added.
Poonawalla Fincorp, earlier known as Magma Fincorp, is a Poonawalla group non-banking finance company (NBFC) that focuses on consumer and MSME financing.
The NBFC Magma Fincorp Ltd (Magma) last year 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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