Poonawalla Fincorp Reports 68% YoY AUM Growth, Expands AI Initiatives in Q2 FY26
Poonawalla Fincorp Limited (PFL) reported robust Q2 FY26 results with 68% YoY AUM growth to Rs. 47,701.00 crores. Key improvements include reduced Gross NPA (1.59%), increased Net Interest Margin (8.40%), and lower Cost of Borrowing (7.69%). The company received a Rs. 1,500.00 crore capital infusion from promoters. PFL expanded its gold loan network to 160 branches and increased consumer durable dealer points to 10,000. The company launched 45 AI projects, with 16 currently operational, focusing on an AI-first transformation strategy across various departments.
*this image is generated using AI for illustrative purposes only.
Poonawalla Fincorp Limited (PFL), a leading non-banking finance company (NBFC) promoted by the Cyrus Poonawalla Group, has reported strong financial performance for the second quarter of fiscal year 2026, marked by significant asset growth and technological advancements.
Key Financial Highlights
PFL's Assets Under Management (AUM) grew by 68% year-on-year to Rs. 47,701.00 crores in Q2 FY26, with a 15.6% quarter-on-quarter growth. This growth was accompanied by improvements in several key financial metrics:
| Metric | Q2 FY26 | Q1 FY26 | Change |
|---|---|---|---|
| Gross NPA | 1.59% | 1.84% | -25 bps |
| Net Interest Margin | 8.40% | 8.32% | +8 bps |
| Cost of Borrowing | 7.69% | 8.04% | -35 bps |
| Stage 1 Assets | 97.10% | 96.50% | +60 bps |
The company's asset quality improved, with gross Non-Performing Assets (NPAs) decreasing to 1.59% from 1.84% in the previous quarter. Stage 1 assets, an indicator of healthy loan performance, rose to 97.10%, reflecting stronger asset quality.
Strategic Developments
During the quarter, PFL received a capital infusion of Rs. 1,500.00 crores through a preferential issue from the promoter, underscoring the promoter's confidence in the company's growth trajectory.
The company has made progress in diversifying its borrowing mix, with the share of Non-Convertible Debentures (NCDs) in total borrowings increasing to 27% from 7% a year ago. This shift has contributed to a 35 basis point reduction in the cost of borrowing, now at 7.69%.
Business Expansion and Innovation
PFL has been expanding its product offerings and distribution network:
- New product disbursements reached Rs. 750.00 crores in September 2025, contributing 17% to total disbursements, up from 11% in the previous quarter.
- The gold loan branch network doubled to 160 from 80 in the last quarter, with plans to reach 400 branches by March 2026.
- Consumer durable dealer distribution points increased from 3,000 in June 2025 to 10,000 in September 2025.
Technological Advancements
The company has made strides in its AI-first transformation strategy:
- Launched 45 AI projects across operations, with 16 currently live.
- Deployed five new AI-powered solutions in HR, governance, and compliance, including an Early Warning System for workforce risk and AI-driven Suspicious Transaction Reporting for financial crime compliance.
- Implemented 'RegIntel', an AI-powered compliance assistant for addressing employee queries on internal policies and regulatory frameworks.
Financial Performance
Despite investments in new businesses and technology, PFL reported a profit after tax of Rs. 74.00 crores for Q2 FY26. The company's focus on expanding its secured asset base and recalibrating its portfolio mix is expected to contribute to improved profitability in the coming quarters.
Arvind Kapil, Managing Director & CEO of Poonawalla Fincorp, commented on the results: "We are reimagining how our organisation works by infusing intelligence into every part of our ecosystem. Our AI-led solutions are designed to make us more agile, transparent, and future-ready. The depth of AI projects across different departments, we believe, makes it an industry-first approach, with some being potential game-changers."
As Poonawalla Fincorp continues to invest in technology and expand its product offerings, the company appears well-positioned for sustained growth in the evolving financial services landscape. The focus on AI-driven solutions and strategic expansion of its secured lending portfolio could potentially lead to improved operational efficiencies and better risk management in the coming quarters.
Historical Stock Returns for Poonawalla Fincorp
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.21% | -4.20% | -2.21% | +27.16% | +53.42% | +1,188.83% |
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