JM Financial report on Poonawalla Fincorp
Poonawalla Fincorp Ltd. (PFL) has transformed into one of the most agile digital lenders. PFL focuses on urban customers in the formal sector of occupation/ employment with adequate credit history. It offers wide-ranging lending products such as Unsecured loans, LAP, Pre-owned car loans, Machinery loans, and Supply Chain Finance, among others. It sets itself apart from its peers in terms of customer experience of digital journey and transparency along with risk adjusted pricing.
Outlook
We expect PFL’s valuation to expand as it begins delivering on its growth target with a stable asset quality. We believe with a steady-state RoE profile of 19-22%, the business will continue to command premium valuations over the medium term. Our target price of INR 400 is based on 4x Sep-24 P/BV. We initiate with a BUY.
More Info
At 15:19 hrs Poonawalla Fincorp was quoting at Rs 304.20, up Rs 17.05, or 5.94 percent.
It has touched an intraday high of Rs 309.00 and an intraday low of Rs 288.70.
It was trading with volumes of 627,404 shares, compared to its thirty day average of 253,063 shares, an increase of 147.92 percent.
In the previous trading session, the share closed down 1.31 percent or Rs 3.80 at Rs 287.15.
The share touched its 52-week high Rs 343.75 and 52-week low Rs 141.00 on 13 April, 2022 and 25 October, 2021, respectively.
Currently, it is trading 11.51 percent below its 52-week high and 115.74 percent above its 52-week low.
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