Poonawalla Fincorp shares slumped 20% to hit one-year low after Q2 results; here’s why

Shares of Poonawalla Fincorp on Friday took a sharp beating after the shadow lender declared its second quarter (Q2 FY25) results. The stock cracked 20 per cent to hit a 52-week low of Rs 286.65. It eventually settled 16.89 per cent lower at Rs 297.65.

The stock started tumbling after the non-banking financial company (NBFC) reported a net loss of Rs 471.04 crore in the September 2024 quarter as against a profit of Rs 854.6 crore in the year-ago period.

Revenue from operations, however, rose 33.88 per cent year-on-year (YoY) to Rs 988.87 crore in Q2 FY25 from Rs 738.65 crore in the corresponding period last year.

The NBFC’s gross non-performing asset (NPA) came at 2.10 per cent, up 74 basis points (bps) YoY and 143 bps QoQ, on account of higher slippages in the short term personal loan (STPL) portfolio. In the STPL portfolio, one-time provisioning of Rs 666 crore was taken during the quarter and recalibrated on credit parameters.

Pre-provision operating profit (PPoP) was at Rs 279 crore in Q2 FY25, including a one-time opex of Rs 71 crore. Liquidity buffer stood at Rs 5,710 crore.

The company said one-time Opex and ongoing investments in technology, distribution and people impacted PPoP during the quarter.

“We have made provisioning for the STPL book with a clear intent for better risk management and financial resilience. We are strengthening our balance sheet for a long-term strategy,” said Arvind Kapil, Managing Director and CEO at Poonawalla Fincorp.

Assets under management (AUM) came at Rs 28,396 crore, up 40 per cent YoY and 5 per cent sequentially. AUM mix consists of 33 per cent MSME finance, followed by 28 per cent personal and consumer finance, 19 per cent loan against property and 15 per cent pre-owned car.