Poonawalla Fincorp’s net profit jumps 118% on loan growth and higher margins

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Poonawalla Fincorp on Wednesday reported a 118% increase in its consolidated net profit to Rs 141 crore in the April-June quarter on the back of strong loan disbursements and improved margins.

Revenue rose to Rs 572 crore in the quarter under review from Rs 483 crore a year ago, Poonawalla Fincorp, which completed a year-long merger with Magma Fincorp, said in a regulatory filing.

Net interest margin – which is interest earned after paying interest on funds – was 9.5%, up 155 basis points (bps) year-on-year, while assets under management rose 22.4% to Rs 17,660 crore as new advances rose 27% to Rs 2,738 crore, said the company, a financial services arm of the Poonawalla group which is popular as the world’s largest Covid vaccine manufacturer under the Serum Institute of India.

Managing Director Abhay Bhutada told PTI that of the total assets, 76% are secured loans and the rest are unsecured.

After merging the larger Magma Fincorp last June, the company had written off more than Rs 700 crore in failed inherited loans, he said, adding that bad debts from Magma’s assets had all been provisioned or written off.

After the write-offs, gross bad debts fell to 2.19% in June from 5.38% and net NPAs to 0.95% from 2.71% with an allowance coverage ratio of 57%.

The Pune-based non-bank finance company focuses on consumer and MSME finance.

On the business loan segment which taps into doctors, lawyers and chartered accountants, he said, the new monthly loan disbursement in this category is over Rs 100 crore and the book total now exceeds Rs 1,200 crore.

The company maintains a strong liquidity position with a surplus of Rs 4,654 crore, he said, adding that the repricing of all eligible term loans and new borrowing at competitive rates has led to a further decline in the average cost of borrowing at 6.9% against 7.4% cent.

Bhutada said the company is now in a growth phase and expects additional loan sales of 30% this year to end the year with a loan portfolio of around Rs 22,000 crore, up from Rs 16,580 crore in March 2022. The company’s shares closed at Rs 271.95 apiece on BSE, up 3.50% from the previous close.

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

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