Q4 2025 Poonawalla Fincorp Ltd Earnings Call Transcript
Key Points
- Poonawalla Fincorp Ltd (BOM:524000) reported a strong AUM growth of 42.5% year-on-year and 15% quarter-on-quarter, surpassing their initial guidance.
- The company successfully launched six new businesses, including gold loans and commercial vehicle loans, which are already live in the market.
- Significant improvements in collection efficiency have been achieved, with forward collection efficiency improving by 9% to 10% and early bucket flows moderating by more than 40%.
- The company has made substantial investments in AI and digital journeys, which are expected to provide a competitive edge in customer assessment and risk management.
- Poonawalla Fincorp Ltd (BOM:524000) has diversified its liability book with a focus on long-term funds, raising INR1,525 crores through NCDs, which increased the NCD contribution to 12% of total borrowings.
- The company's net interest income (NII) growth has not kept pace with AUM growth due to a recalibration of the STPL portfolio, which initially slowed down.
- Credit costs have been elevated, with full-year write-offs amounting to INR1,548 crores, although they have started to decline in recent quarters.
- Operating expenses are expected to increase in the next two quarters due to investments in new businesses and branch expansions.
- The company has consumed a significant portion of its capital, with a capital adequacy ratio now at 22.94%, raising concerns about potential future capital requirements.
- Despite improvements, the residual STPL book still poses a risk, although 80% of it is now 0 DPD, and the company does not expect increased stress from it.
Ladies and gentlemen, good day, and welcome to the Poonawalla Fincorp Limited Q4 FY24/'25 and FY25 earnings conference call. We have with us today on the call Mr. Arvind Kapil, Managing Director and Chief Officer; Mr. Sunil Samdani, Director; Mr. Shriram Iyer, Chief Credit and Analytics Officer; and other senior management officials.
(Operator Instructions) Please note that this conference is being recorded. I now hand the conference over to Mr. Arvind Kapil, Managing Director and Chief Officer of Poonawalla Fincorp Limited. Thank you, and over to you, sir.
Thank you. A very good evening to all of you. Let me begin by summarizing our last 10 months guidance versus actual what's happened on the ground, followed by a brief update on our performance during this quarter and the details on a couple of initiatives, which we believe will add immense value to our building blocks in business, distribution, tech, AI, digital journeys, one of the key initiatives that we have
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