Q1 2026 Poonawalla Fincorp Ltd Earnings Call Transcript
Key Points
- Poonawalla Fincorp Ltd (BOM:524000) reported a strong year-on-year AUM growth of 53%, reaching INR41,273 crores as of June 30, 2025.
- The company has successfully increased its share of NCDs in total borrowing from 7% in March 2025 to 24% in June 2025, which is expected to reduce borrowing costs.
- Poonawalla Fincorp Ltd has launched several new businesses, including Prime Personal Loans and Gold Loans, which are showing promising growth and market traction.
- The company is heavily investing in AI and digital marketing, conducting over 500 experiments to enhance customer acquisition and reduce costs.
- The credit cost for 12 core products, excluding STPL, improved to 1.43%, indicating strong risk management and credit quality.
- The company experienced a moderation in net interest margin due to portfolio recalibration, with expectations to return to 9% within the next three to four quarters.
- There is a significant portion of the old STPL book remaining, which is expected to run down over the next seven to eight months, posing a potential risk.
- The company's operating expenses remain high as it continues to invest in new businesses and distribution, impacting profitability.
- Despite improvements, the overall credit cost remains elevated at 2.61%, which is higher than the company's long-term target of 1.5% to 2%.
- The MSME segment, which constitutes a significant portion of the portfolio, requires careful risk calibration due to potential industry volatility.
Ladies and gentlemen, good day, and welcome to the Poonawalla Fincorp Limited Q1 FY26 earnings conference call.
We have with us today on the call Mr. Arvind Kapil, Managing Director and Chief Executive Officer; Mr. Sunil Samdani, Executive 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 Executive Officer of Poonawalla Fincorp Limited. Thank you, and over to you, sir.
Thank you. A very good evening to all of you. It's always a pleasure to interact -- and maybe the right time, looking at the excitement today. I think the best would be to start with our take on the industry and how -- the best way to welcome the first earning call probably for the financial year, '25, 26. Let me begin by sharing an industry perspective from our lens, and how we're
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