Buy Poonawalla Fincorp, target price Rs 350: Motilal Oswal

Motilal Oswal has buy call on Poonawalla Fincorp Ltd. with a target price of Rs 350. The current market price of Poonawalla Fincorp Ltd. is Rs 281.

Poonawalla Fincorp Ltd., incorporated in the year 1978, is a Small Cap company (having a market cap of Rs 21557.16 Crore) operating in NBFC sector.

Poonawalla Fincorp Ltd. key Products/Revenue Segments include Interest, Fees & Commission Income, Rental Income, Income From Sale Of Share & Securities for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 654.89 Crore, up 14.56 % from last quarter Total Income of Rs 571.67 Crore and up 27.76 % from last year same quarter Total Income of Rs 512.58 Crore. Company reported net profit after tax of Rs 163.12 Crore in latest quarter.


Investment Rationale
The brokerage models an AUM/PAT CAGR of 37%/~65% over FY22-FY25E, respectively. It also model an RoA/RoE of 4.8%/~12% in FY25E. PFL will have more levers from its fee income and operating cost ratios to deliver a further improvement in its RoE profile when it reaches steady-state.

Promoter/FII Holdings
Promoters held 61.49 per cent stake in the company as of 30-Jun-2022, while FIIs owned 7.35 per cent, DIIs 5.71 per cent.