NBFC Poonawalla Fincorp on Monday reported its highest-ever quarterly profit of Rs 200 crore with a 62% year-on-year rise for the April-June quarter, driven by an increase in net interest margin, a reduction in operating expenses and robust asset quality.
The net interest margin (NIM) for the quarter improved by 108 basis points y-o-y to 11.4% and by 12 bps sequentially. Operating expenses for Q1FY24 were down 4% y-o-y to Rs 183 crore and 7% sequentially.
The Adar Poonawalla-owned company is all set to close the sale of its housing finance subsidiary, Poonawalla Housing Finance, in the next week. The company had in December 2022 announced the sale of its housing subsidiary to TPG for Rs 3,900 crore.
The consumer and MSME finance-focused NBFC reported the highest-ever quarterly disbursements at Rs 7,063 crore, up 143% y-o-y. Assets under management were up 41% y-o-y to 17,776 crore.
Gross NPA at 1.42% reduced by 126 bps y-o-y and by 2 bps q-o-q while net NPA at 0.76% reduced by 35 bps and 2 bps q-o-q.
Poonawalla’s direct digital programme’s contribution to disbursements increased to 86% in Q1FY24 as compared with 81% in Q4FY23.
Abhay Bhutada, managing director of the firm, said the FY23 momentum was continuing ahead in Q1FY24.
The company is going to launch a super app on August 15, which will lead to an increase in direct customer acquisition by the company, reduce cost and improve their margins further, Bhutada said at the earnings call.
“The company will be getting into digital unsecured short-term loans. The super app will also enable them to cross-sell products. Disbursement will be done in three-four hours to 48 hours,” Bhutada said.
The belief is that the customer needs a combo of fintech, NBFC and bank, which is an opportunity for Poonawalla Fincorp, he said, adding that they are betting on the package of their offering to attract customers with loans that are collateral free, 100% digital, promising quick turnaround, minimum documentation, flexible tenure, lower interest charges and zero prepayment charges.
The company will also be launching a co-branded credit card along with a bank in three to four months and is awaiting the final regulatory approval, Bhutada said.
“An EMI card is also going to be launched in the second half of this year. The fintech model, with a focus on increasing productivity and improving efficiency will lead to a reduction in operating expenses,” Bhutada said.
The company has maintained long-term guidance of a 35-40% growth in AUM, 30-35% profit growth, net NPA in the 0.5-0.9% range and Gross NPA at 1.3-1.8%.