Poonawalla Fincorp shares climbed 3.47% in early Monday trading, touching an intraday high of ₹492.60 before settling at ₹466.15 around midday, as investors responded positively to the non-banking finance company's exceptional third-quarter results. The stock's advance reflects strong investor confidence despite mixed analyst assessments following the company's remarkable financial performance.

Stock Performance and Market Response

Trading activity remained robust with volumes reaching 41.21 lakh shares worth ₹197.00 crore by midday, though sellers dominated at 85% of transactions. The stock has delivered impressive returns of 48% over the past year, although it remains 18% below its October peak of ₹570.00.

Exceptional Financial Performance

The company's Q3 financial results demonstrated outstanding growth across key performance metrics, driving the positive market sentiment:

The company's profit after tax surged 102% quarter-on-quarter to ₹150.00 crore, while return on assets improved to 1.20%. Assets under management grew robustly by 78% year-on-year to ₹55,017.00 crore, driven by strong performance across consumer and commercial lending segments.

Mixed Analyst Outlook

Analyst opinions remain divided despite the strong operational performance. JM Financial upgraded its rating to REDUCE from SELL, raising the target price marginally to ₹430.00 from ₹425.00, citing expensive valuations at 2.30 times price-to-book ratio despite improved profitability. Conversely, Motilal Oswal maintained a BUY rating with a ₹610.00 target, highlighting the company's profitability inflection point and strong growth trajectory.

Strategic Capital Expansion

The company's board has approved raising up to ₹5,500.00 crore through equity issuance to support ambitious growth plans targeting 35-40% annual AUM growth. While this capital raise provides financial flexibility for expansion, analysts note it will moderate near-term return on equity. The strategic move positions Poonawalla Fincorp to capitalize on growth opportunities in the evolving financial services landscape.

Poonawalla Fincorp Limited announced strong unaudited financial results for the quarter ended December 31, 2025, demonstrating robust growth across key performance indicators. The systemically important NBFC, focusing on consumer and MSME finance, delivered impressive year-on-year and quarter-on-quarter improvements in its financial metrics, with Net Interest Income surging 60.6% year-over-year to ₹1,080 crore.

Financial Performance Highlights

The company's financial performance for Q3FY26 showed significant momentum across multiple parameters:

The company's Net Interest Margin improved to 8.62% in Q3FY26 compared to 8.40% in Q2FY26, indicating enhanced profitability. The secured to unsecured on-book mix maintained a balanced ratio of 56:44, reflecting the company's diversified lending portfolio.

Asset Quality and Risk Management

Poonawalla Fincorp demonstrated stable asset quality metrics during the quarter, with improvements in key risk indicators:

The improvement in asset quality metrics reflects the company's disciplined risk management approach and strengthening credit processes. Stage 1 assets, representing performing loans, increased to 97.4% of on-book assets.

Capital Position and Liquidity

The company maintained a strong capital position with a Capital Adequacy Ratio of 18.17%, including Tier-1 capital at 17.15%, significantly above the regulatory requirement of 15.00%. This robust capital base provides adequate cushion for future growth initiatives.

Poonawalla Fincorp's liquidity position remained strong with a buffer of ₹6,488 crore as of December 31, 2025. The cost of borrowings decreased to 7.65% for the quarter, representing a 4 basis points reduction compared to Q2FY26, indicating improved funding efficiency.

Technology and Innovation

The company continued its focus on technological advancement by adding 12 new AI projects during the quarter, bringing the total to 57 cutting-edge AI projects. This technological investment supports the company's operational efficiency and customer service capabilities.

Management Commentary

Mr. Arvind Kapil, Managing Director and CEO, highlighted the strong performance, stating that the results mark a significant step-up in performance reflecting disciplined execution. He emphasized that the profit after tax doubled quarter-on-quarter, driven by a 36.5% sequential increase in pre-provision operating profit, with return on assets improving to 1.20%.

Business Overview

Poonawalla Fincorp operates as a Cyrus Poonawalla group promoted non-deposit taking systemically important NBFC, registered with the Reserve Bank of India. The company employs 5,264 people as of December 31, 2025, and offers diverse financial services including Loan Against Property, Gold Loans, Personal Loans, Education Loans, Business Loans, and various other lending products across consumer and MSME segments.