This Cyrus Poonawalla Group stock yielded 380% returns in one year!

This Cyrus Poonawalla Group stock yielded 380% returns in one year!

by 5paisa Research Team Last Updated: Dec 10, 2022 - 09:55 am 43.7k Views
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The stock price which stood at Rs 40.95 on 1 January 2021, closed at Rs 196.90 on 24 December 2021. It has a 52-week high and low of Rs 226.50 and Rs 38.90, respectively.

Poonawalla Fincorp Limited, a non-banking financial company headquartered in Pune has turned into a multibagger by delivering staggering returns of 380% in just one year. The stock price which stood at Rs 40.95 on 1 January 2021, closed at Rs 196.90 on 24 December 2021. It has a 52-week high and low of Rs 226.50 and Rs 38.90 respectively.

The company offers a variety of financial products which includes commercial finance, agri-finance, SME finance and mortgage finance. With widespread coverage and presence across various branches, it caters to the needs of the rural and semi-urban sectors.

While the company has a general insurance subsidiary under the name Magma HDI General Insurance Limited (Magma HDI), last month, on 2 November, the company informed that it has proposed divestment of stake in the insurance subsidiary. This step was taken to comply with IRDAI’s “Registration of Insurance Companies Regulation” which states that a promoter of an insurance company cannot be a subsidiary of another company. Also, the proceeds from the divestment shall be allocated to the company’s core lending business.

Talking about the performance in the recent quarter Q2FY22, on a stand-alone basis, the company’s net revenue declined by 19.7% YoY to Rs 386.23 crore. While the PBIDT (ex OI) declined by 9.88% YoY to Rs 235 crore, the PAT jumped by a stellar 279.69% YoY to Rs 74 crore. During this period, the Assets Under Management (AUM) grew by approximately 6% QoQ to Rs 15,275 crore. The NIM went up by 104 bps YoY to 9.1% in Q2FY22 (8.0% in Q2FY21), which came on the back of a reduction in interest expenses. The collections which stood at 93.1% in June 2021, improved to 99.9% in September 2021.

The company also has a strong liquidity position with around Rs 1,700 crore of surplus liquidity, with additional term loan sanctions of Rs 1750 crore. Moreover, with the intent of capital infusion and rebranding, it rolled out new products such as Personal loans, Loans to Professionals and SME LAP. Going forward, the company has plans to introduce medical equipment loans, small ticket LAP and co-lending/fintech partnerships.

At 11.38 am, the share price of Poonawalla Fincorp Limited was trading at Rs 200.6, which was an increase of 1.88% from the previous week’s closing price of Rs 196.90 on BSE.

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