🧾 At a glance
Poonawalla Fincorp (formerly Magma Fincorp) is a prime example of what happens when a distressed NBFC gets injected with vaccine capital. After the Cyrus Poonawalla Group’s ₹3,206 Cr infusion in 2021, the company’s balance sheet cleaned up faster than a political biography. And yet — FY25 ended with a ₹98 Cr loss. Here’s a 5-year recap of a company that was supposed to gallop — but hit a pothole.
💳 About the Company
- RBI-registered non-deposit taking NBFC
- Offers:
- MSME loans (focus vertical)
- Consumer finance
- Insurance via stake in Poonawalla General Insurance
- Legacy: Used to be Magma Fincorp, acquired by Rising Sun Holdings (Cyrus Poonawalla Group) in 2021
💼 Key Developments (FY21–FY25)
- 💉 2021: Poonawalla Group pumps ₹3,206 Cr
- 🚀 2022–24: Clean-up, tech-driven growth, strong digital onboarding
- 🏦 2025:
- Launched 24×7 digital MSME lending platform
- Issued ₹500 Cr secured NCDs at 7.58%
- Stock Options granted under ESOP Scheme II
- Reported loss of ₹98 Cr in FY25 vs ₹1,683 Cr profit in FY24 😬
📊 5-Year Financial Performance
| ₹ in Cr | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | 2,319 | 1,540 | 2,177 | 5,418 | 4,190 |
| Net Profit | -559 | 375 | 685 | 1,683 | -98 |
| EPS (₹) | -20.7 | 4.9 | 8.91 | 21.73 | -1.26 |
| Gross NPA (%) | — | 2.19% | 1.52% | — | — |
| Net NPA (%) | — | 0.95% | 0.83% | — | — |
| ROE | -23% | 6% | 8% | 14% | -1% |
📉 FY25 Shock: Financing profit turned negative, Opex ballooned, and EPS crashed to red. One-off or structural?
💰 Fair Value Estimate
Let’s price this NBFC for FY26–27 assuming FY25 was a blip:
- ROE normalizes to ~12%
- Book Value: ₹105
- Target P/B multiple: 2.5–3.0x
📈 Estimated FV Range: ₹260–₹315
Current price (₹423) = priced for perfection, but execution missed in FY25.
📈 Balance Sheet Snapshot
| ₹ in Cr | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Equity Capital | 153 | 154 | 154 | 155 |
| Reserves | 5,903 | 6,708 | 8,013 | 8,020 |
| Borrowings | 9,973 | 11,209 | 15,216 | 26,081 |
| Total Assets | 16,443 | 23,221 | 24,087 | 35,030 |
| ROCE | — | — | 4.79% | 4.79% |
💣 Warning sign: Borrowings jumped 71% in FY25 — where did that go?
🤖 Digital MSME Push
- New product launched: 24/7 digital MSME loans
- AI-based risk assessment system
- Claims to reduce TAT (Turnaround Time) from 7 days to 3 hours
- But contribution to revenue not yet broken out — probably too early to tell
🧠 EduInvesting Take
Let’s be blunt:
Cyrus Poonawalla gave this company a COVID-sized cash shot in 2021, cleaned up NPAs, introduced tech, and built a brand new NBFC from the ashes of Magma. But FY25 feels like a hangover year.
Financing margin dipped, profit tanked, and market seems confused.
So is this a growth pause, or did the NBFC just hit platform fatigue?
Our take:
- FY25 had extraordinary expenses (possible write-downs, tech spends)
- But the core business is intact
- Investor optimism (high P/B of 4x) assumes FY26 will rebound — it better
Otherwise, the only thing “galloping” will be Cyrus’ patience.
⚠️ Risks & Red Flags
- 🔻 FY25 net loss despite ₹5,000+ Cr revenue
- 📉 Spike in borrowings without clear matching income
- 🧾 May be capitalizing interest again (as per Screener warning)
- ❌ ROE still sub-5% on 3-year average
- 🤷♂️ Loan book granularity not broken out by risk tier — no idea how “clean” the MSME pool really is
🏁 TL;DR
| Metric | FY25 Status |
|---|---|
| Revenue | ₹4,190 Cr |
| Net Profit | ₹-98 Cr |
| ROE | -1% |
| Gross NPA (FY23) | 1.52% |
| Book Value | ₹105 |
| CMP | ₹423 |
| Fair Value Estimate | ₹260–₹315 |
| Promoter Holding | 62.5% |
| MSME Lending Platform | Launched |
| NCD Issue (Jun 2025) | ₹500 Cr @ 7.58% |
Tags: Poonawalla Fincorp, 5-year review, MSME digital loan NBFC, Magma Fincorp transformation, Poonawalla net profit fall, NBFC stocks 2025, Cyrus Poonawalla finance company, MSME lending India
Author: Prashant Marathe
Date: 12 June 2025
