Emkay Cuts ‘Poonawalla Fincorp Share Price Target’ to Rs 280 - Here’s Why

Brokerage house Emkay Global has revised its outlook on Poonawalla Fincorp, maintaining a ‘Reduce’ rating while revising its  share price target upward by 12% to Rs 280 for March 2026. The revision comes after a mixed performance in Q4FY24, where elevated credit costs and operational expenses dented profitability.

"Poonawalla reported another patchy quarter (Q4) with elevated credit cost (3.03% of AUM) and opex (4.6% of AUM) pushing profitability materially lower (RoA of 0.76%)," Emkay noted in its report.

At present, the stock is trading at a current market price (CMP) of Rs 380, implying a downside potential from current levels based on the revised target.

Poonawalla Fincorp Q4 Results FY25 
For the January–March quarter, Poonawalla Fincorp reported a PAT of $ 623 million, hit by higher credit costs, rising operational expenses, and softer margins. Disbursements surged 31% QoQ to $ 93.7 billion, supporting a strong sequential AUM growth of 15%.

However, profitability remained under pressure. Management highlighted that operational expenses would stay elevated for at least two more quarters, driven by tech investments pegged at $ 500 million per quarter. Credit quality indicators showed stability with Gross Stage 3 (GS3) and Net Stage 3 (NS3) assets at 1.84% and 0.85%, respectively.

Read More 
Poonawalla Fincorp’s Q4 Net Profit Falls 81%, Hits Rs 62 Crore


Strong growth ambitions but risks remain: Emkay
Despite current profitability pressures, management remains upbeat about the future. They target 30-35% risk-adjusted growth, banking on AI-led efficiencies, branch expansions, and a refreshed product lineup.

“With the clean-up largely done (legacy STPL now 8% of the book) and leadership fully in place, the management is confident of 5–6x book growth over 5 years, while targeting a robust, profitable business, and 3–3.5% RoA within 3 years,” the Emkay report stated.

The company also plans to raise Rs 40 billion in FY26 to fuel its growth ambitions, which is expected to boost the book value per share (BVPS) by 25% over FY26-27.
Estimates tweaked; Emkay cautious despite optimism
 

Factoring in the Q4 performance, Emkay has adjusted its FY26-27 estimates:
AUM growth assumption is raised by ~5%
FY26 earnings are cut by ~26%, while FY27 earnings see a ~9% upgrade
Credit cost assumptions have been raised
$ 40 billion fundraise in FY26 is factored in

These adjustments imply a 3-5% RoE contraction over FY26-27E.

Poonawalla Fincorp Share Price Target
“We reiterate REDUCE and revise up our Mar-26E TP by 12% to Rs280, (implying FY27E P/BV of 1.7x),” Emkay concluded, while cautioning that in a hyper-competitive retail segment, asset quality and profitability outcomes largely hinge on management execution.

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