Synopsis: Shares remain in focus after UBS set a ₹640 target, implying 44% upside from ₹451. The brokerage expects RoA to reach 2% by FY28 and sees value at 2.4x FY27E P/B. The firm also plans to raise ₹1,000 crore via listed NCDs.
India’s NBFC sector plays a vital role in financial inclusion, powering retail, MSME, and underserved lending with speedy credit delivery. In FY2026, assets under management are projected to hit ₹48-50 lakh crore, growing 15-17% YoY amid strong consumption demand. NBFCs command 18-19% of total credit market share, outpacing banks in growth.
With a market capitalisation of Rs 36,628.33 crore, the shares of Poonawalla Fincorp Ltd were trading at Rs 450.65 per share, decreasing around 0.88 percent as compared to the previous closing price of Rs 454.65 apiece.
Brokerage Recommendations
UBS has initiated a bullish stance on the NBFC stock, assigning a ‘Buy’ rating with a target price of ₹640. This implies a potential upside of 44% from the recent closing price of ₹451. The recommendation reflects confidence in the company’s growth outlook, earnings trajectory, and improving return ratios.
Rational
The brokerage said that strong management and promoter-driven AAA credit rating are key positives for the stock, further adding that the loan against property and gold loans are going to be the anchor products for the firm going forward. Poonawalla Fincorp’s return on assets (RoA) is likely to reach 2% by the financial year 2028, supported by healthier margins and lower costs, UBS wrote in its note.
At 2.4 times its September 2027 estimated price-to-book value (assuming capital is raised), the market is not fully capturing Poonawalla Fincorp’s potential growth trajectory and expansion in its RoA, UBS said. UBS wrote further that any delayed equity raising and weaker-than-expected asset quality are the key risks for the stock.
Meanwhile, analyst sentiment on the stock remains divided. Of the nine analysts tracking it, four have a ‘buy’ rating, four recommend ‘sell,’ and one suggests ‘hold.’ This split view reflects mixed expectations around growth prospects, asset quality trends, and funding strategy going forward.
Earlier this month, Poonawalla Fincorp’s finance committee approved raising up to ₹1,000 crore through secured, redeemable, rated and listed NCDs via private placement. The company plans to issue 1 lakh debentures with a face value of ₹1 lakh each, which will be listed on the BSE in dematerialised form.
The company delivered an exceptional Q3FY26 performance, with revenue surging 72% year-on-year to Rs 1,818 crore. Even more striking, net profit skyrocketed 689% to Rs 150 crore from a low base of Rs 19 crore. The sharp jump reflects strong operating leverage, improved margins, and a significant turnaround in overall profitability.
Poonawalla Fincorp Limited is a leading non-banking financial company focused on consumer and MSME lending in India. Backed by the Cyrus Poonawalla Group, the company emphasises risk-calibrated growth, digital-led distribution, and diversified products such as personal loans, business loans, gold loans, and loans against property to drive sustainable expansion.
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