Poonawalla Fincorp Q3FY22 consolidated profit up 638% yoy to Rs96cr; Stock up 1%

2 Feb 2022 , 09:55 AM

The Board of Directors of Poonawalla Fincorp Limited (PFL), a non-deposit taking systemically important NBFC focusing on consumer and small business finance, on Tuesday announced its un-audited results for the quarter ended December 31, 2021 (Q3FY22). The consolidated results include the performance of PFL’s housing finance subsidiary, Poonawalla Housing Finance Limited (PHFL), and its joint venture, Magma HDI General Insurance Company Limited (MHDI).

The company posted a profit of Rs96cr in Q3FY22 compared to Rs13cr in Q3FY21, a huge rise of 638% yoy, driven largely by a reduction in interest cost and recovery led credit costs. Consolidated PBT was up 651% yoy, increasing from Rs17cr in Q3FY21 to Rs130cr in Q3FY22.

Net Interest Margins (NIM) stood at 8.8% in Q3FY22, up from 8.5% in Q3FY21. However, sequentially NIM declined from 9.1% in Q2FY22. Its credit costs declined sharply to just Rs2cr from Rs182cr in Q3FY21 and Rs35cr in Q2FY22. Assets Under Management remained at Rs15,228cr. Collections continued to remain buoyant; above 99% in Dec’21.

At around 10.00 AM, Poonawalla Fincorp Ltd was trading at Rs284.50 up per share by Rs2.65 or 0.94% from its previous closing of Rs281.85 per share on the BSE.

Asset Quality
Consequent to healthy collections in Q3FY22, Gross Stage 3 and Net Stage 3 assets decreased from 4.1% and 2.0% respectively as at Sep’21 to 3.5% and 1.8% respectively as at Dec’21 on a consolidated basis. The Company has one of the best provision coverage ratios across all three stages. Standard asset coverage ratio as at Dec’21 stands at 3.3%; Stage 3 asset coverage ratio stands at 50.1%.

Liquidity and Cost of Borrowings
The Company continues to maintain a strong liquidity position with over Rs3,200cr of surplus liquidity, and additional term loan sanctions in hand of Rs1,490cr. The repricing of all eligible term loans has been competed in Q3FY22, with overall reduction of over 160 bps. New loan sanctions received at sub 6.5%.

The company was assigned a long-term rating of ‘AA+ / Stable’ by CRISIL. The short-term rating was retained at the highest level of ‘A1+’.

Business Update
The Company continued its product focus on consumer and small businesses. During the quarter, the Company entered into multiple co-lending / fintech partnerships along with adding small-ticket LAP and medical equipment loan products.