Last year, Abhay Bhutada, Poonawalla Fincorp’s MD committed to maintaining Net Interest Margins (NIM) above 10%. The recently disclosed results for the third quarter of the fiscal year 2023-2024 now affirm their stellar performance. The company's profit surged impressively by 76.3 percent to Rs 265.14 crore, showcasing the impactful leadership of its Managing Director.
The financial landscape painted by Anand Rathi's report echoes this success, highlighting a 76 percent increase in net profit, reaching Rs 2,651 million. Poonawalla Fincorp emerges as a frontrunner in the financial sector, credited to astute leadership and effective planning.
Also Read: What Is The Net Interest Margin?
The MD’s promise to maintain NIM above 10% was not just a mere declaration but a commitment backed by results. In Q3, the Net Interest Margin soared to an impressive 11.02 percent, demonstrating the company's adept handling of financial matters and its ability to generate substantial revenue from interest on loans.
A key contributor to Poonawalla Fincorp's success is the substantial interest income, which escalated to Rs 714.41 crore in the last quarter. This figure significantly outshines the Rs 460.48 crore from a year ago and even surpasses the Rs 690.07 crore from the preceding quarter. The strategic management of funds and judicious lending practices played a pivotal role in this remarkable achievement.
Abhay Bhutada, expressing satisfaction with the results, stated, "We continued to showcase exemplary growth in Q3FY24 with highest ever quarterly disbursement and profit and strong AUM growth while maintaining a superior asset quality." In essence, the company strategically increased lending, resulting in more substantial profits, all while keeping its financial foundation robust.
Turning attention to the company's assets, Poonawalla Fincorp exhibited prudence in ensuring the quality of its portfolio. In the October-December quarter, Gross Non-Performing Assets (NPA), or bad loans, decreased by 36 basis points compared to the previous year. This decline, with the Gross NPA at 1.33 percent, down from 1.69 percent a year ago, and the Net NPA decreasing to 0.70 percent from 0.89 percent, indicates the company's vigilant approach to lending and risk management.
Poonawalla Fincorp excelled not only in lending but also in asset management. The company disbursed a substantial Rs 8,731 crore in the last quarter. This marked a remarkable 159 percent increase from the previous year and a 12 percent rise from the preceding quarter. The Assets Under Management (AUM), reflecting the total funds managed by the company, reached Rs 21,946 crore. This was a robust 58 percent increase from the previous year and a solid 9 percent uptick from the last quarter.
What Is Next For Poonawalla Fincorp?
Looking ahead, Poonawalla Fincorp has strategic plans to raise Rs 4,000 crore by issuing Non-Convertible Debentures, indicating a thoughtful approach to fueling future growth in the coming financial year. This foresight aligns with the company's commitment to sustained growth and market resilience, further validated by a 1.42 percent increase in its shares, reaching Rs 490.40 each on January 18.
Poonawalla Fincorp's success in Q3 extends beyond mere financial gains; it reflects the fulfillment of a promise by its MD to steer the company to new heights. The commendable financial results, coupled with effective risk management and growth strategies, position Poonawalla Fincorp as a standout player in the dynamic realm of finance.
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