1. At a Glance
Q1 FY26 was less “NBFC growth story” and more “rollercoaster soap opera”. From a ₹292 Cr PAT in Q4 to a staggering ₹327 Cr net loss in Q1, Poonawalla Fincorp dropped jaws. And just as investors reached for aspirin, the promoters came in with a ₹1500 Cr preferential equity booster shot. AUM? Up 53%. P&L? Down in flames.
2. Introduction with Hook
Imagine you’re cruising on a highway at 120 km/h, and suddenly your car decides to moonwalk in reverse. That’s Q1 FY26 for Poonawalla Fincorp.
- ₹1499.99 Cr preferential issue to promoter group (Rising Sun Holdings)
- Net Loss: ₹327 Cr (yes, you read that right)
- AUM up 53% YoY — but profit fell off a cliff
This isn’t a blip. This is a rewire.
3. Business Model (WTF Do They Even Do?)
Poonawalla Fincorp is a digital-first NBFC, focusing on MSME loans, consumer finance, and personal loans.
No branches. No suits. Just APIs and algorithms.
Also owns a general insurance arm and had earlier dabbled in housing finance (now sold). Think of it as FinTech with a CIBIL score.
Promoted by the Poonawalla family — yes, the same one that gives your arm a Covishield jab.
4. Financials Overview
| Metric | Q4 FY25 | Q1 FY26 |
|---|---|---|
| Revenue | ₹1166 Cr | ₹1314 Cr |
| PAT | ₹292 Cr | -₹327 Cr |
| EPS | ₹3.76 | -₹4.22 |
| AUM Growth YoY | 50% | 53% |
Commentary:
- Revenue is growing steadily.
- AUM is exploding.
- But profitability took a flying kick to the face.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹413 |
| Book Value | ₹105 |
| P/B | 3.93x |
| ROE | -1.28% (TTM) |
Fair Value Range (Assuming Normalisation):
- Based on 3.5–4x Book Value: ₹365–₹420
- Risk-Adjusted Valuation Post Q1: ₹300–₹350 until clarity returns
Basically, you’re buying a Ferrari… that just skidded off the road. High torque. No brakes. Promoter is the tow truck.
6. What’s Cooking – News, Triggers, Drama
- ₹1500 Cr Preferential Equity Issue Approved — Promoters doubling down.
- NCD Limit Raised to ₹20,000 Cr — gearing up for aggressive debt push.
- Credit Ratings: AAA reaffirmed (CARE, CRISIL) — but market isn’t buying it yet.
- Digital MSME loan platform launched — AI-powered lending with dreams of zero delinquency.
Meanwhile, Q1’s P&L looked like it was run over by a fintech elephant.
7. Balance Sheet
| FY | Equity | Reserves | Borrowings | Total Assets |
|---|---|---|---|---|
| FY23 | ₹154 Cr | ₹6708 Cr | ₹11,209 Cr | ₹23,221 Cr |
| FY25 | ₹155 Cr | ₹8020 Cr | ₹26,081 Cr | ₹35,030 Cr |
Notes:
- Borrowings more than doubled — they’re playing “Go Big or Go Home”.
- Equity capital stable — promoter infusion now changes that.
- Assets ballooning — but liabilities are chasing close behind.
8. Cash Flow – Sab Number Game Hai
| FY | Ops CF | Inv CF | Fin CF | Net CF |
|---|---|---|---|---|
| FY24 | -₹7,556 Cr | ₹2,725 Cr | ₹4,331 Cr | -₹501 Cr |
| FY25 | -₹10,569 Cr | -₹482 Cr | ₹10,821 Cr | -₹231 Cr |
TL;DR: Operating cash flows = Himalayan negative.
Finance flow = IV drip from promoters and bond markets.
They’re not burning cash. They’re vaporizing it.
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | -1.28% |
| ROCE | 4.77% |
| Net NPA | 0.83% |
| P/B | 3.93x |
| Interest Coverage | <1.0x (low) |
Verdict:
You don’t buy this for the ratios. You buy it for the turnaround fairy tale.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | PAT |
|---|---|---|
| FY23 | ₹2,177 Cr | ₹685 Cr |
| FY24 | ₹5,418 Cr | ₹1,683 Cr |
| FY25 | ₹4,190 Cr | -₹98 Cr |
| Q1 FY26 | ₹1,314 Cr | -₹327 Cr |
That’s a quarterly loss bigger than FY25’s full-year damage.
This quarter isn’t a speed bump. It’s a sinkhole.
11. Peer Comparison
| Company | CMP | P/E | ROE | PAT (TTM) |
|---|---|---|---|---|
| Bajaj Finance | ₹914 | 32x | 19.2% | ₹17,425 Cr |
| Shriram Finance | ₹615 | 13.6x | 15.6% | ₹8,508 Cr |
| SBI Cards | ₹889 | 44x | 14.8% | ₹1,916 Cr |
| Poonawalla | ₹413 | NA | -1.3% | -₹327 Cr |
The kid who used to top the class is now repeating the semester. But Dad just bought the school.
12. Miscellaneous – Shareholding, Promoters
| Quarter | Promoter | FIIs | DIIs | Public |
|---|---|---|---|---|
| Jun ’25 | 62.46% | 10.76% | 12.26% | 13.86% |
Promoter stake steady and dominant.
FIIs & DIIs increasing — institutional trust remains.
Public stake falling — retail exited when the music stopped.
13. EduInvesting Verdict™
Q1 FY26 may go down in NBFC history as “The Great Earnings Vanishing Act”. But Poonawalla’s ₹1500 Cr equity infusion is a clear message — they’re not backing down.
Execution risk is now front and center. But if they fix the engine, this rocket ship can fly.
Final Take:
A wild ride with a rich driver. Just don’t forget to buckle up.
Written by EduInvesting Team | 25 July 2025
Tags: Poonawalla Fincorp Ltd, NBFC, Preferential Issue, Q1 FY26 Results, Cyrus Poonawalla Group, EduInvesting Premium
