100% Dividend: Large Cap NBFC Stock Okays Rs 2/Share Payout In FY24; Buy?

Poonawalla Fincorp Ltd is a large-cap NBFC company with a market cap of Rs 38,094.93 Cr. Following the announcement of financial results for the quarter ending December 31, 2023, and a 100% interim dividend for FY24, the S&P BSE 500 stock is in the spotlight for market watchers.

Poonawalla Fincorp Dividend

The Board of Directors "Declared Interim Dividend of Rs. 2/- per equity share (100%) of face value of Rs. 2/- each for the financial year ending on March 31, 2024; such Dividend will be paid on and after February 13, 2024 to those Members entitled thereto. Fixed Wednesday, January 31, 2024, as the Record Date for the purpose of determining entitlement of the Members for such Interim Dividend pursuant to Regulation 42 of the SEBI Listing Regulations," said Poonawalla Fincorp in a stock exchange filing.

Poonawalla Fincorp Fundraising Plan

The Board also "Approved raising of funds through issuance of Non-Convertible Debentures ("NCD") on private placement basis for the financial year 2024-25 for an amount up to Rs. 4000 Crore and has delegated the authority for issuance of such NCDs to the Finance Committee," said the NBFC company in a regulatory filing.

Poonawalla Fincorp Financials

Poonawalla Fincorp Limited's board of directors has released its unaudited financial records for the quarter ended on December 31, 2023. During this period, the company's financial performance remained solid, with notable spikes in AUM and profitability, excellent asset quality, and client engagement. With a 159% YoY and 12% QoQ growth, Poonawalla Fincorp has made a record-breaking quarterly disbursement of Rs 8,731 crore. AUM (Assets Under Management) at Poonawalla Fincorp was Rs 21,946 crore, growing 9% QoQ and 58% YoY. The company said its gross NPA stood at 1.33%, dropped 36 bps YoY and 3 bps QoQ and net NPA reached 0.70%, dropping 19 bps YoY and 2 bps QoQ during Q3FY24.

Net Interest Margin (NIM) was at 11.02%, up 33 bps YoY, while Poonawalla Fincorp posted its highest-ever quarterly net profit of Rs 265 crore, up 76% YoY and 15% QoQ. Return on Assets (RoA) for the NBFC firm was 5.3%, up 34 bps QoQ and 84 bps YoY. With a spike of 206 bps YoY and 18 bps QoQ, the Opex to AUM ratio was recorded at 4.00%. With a 125% YoY and 4% QoQ growth, its Operating Profit (PPOP) was Rs 350 crore. Poonawalla Fincorp said its capital adequacy ratio stood at 38.2% while liquidity buffer reached Rs 2,973 Cr during the quarter under review.

Mr. Abhay Bhutada, Managing Director, Poonawalla Fincorp, said, "We continued to showcase exemplary growth in Q3FY24 with highest ever quarterly disbursement & profit and strong AUM growth while maintaining a superior asset quality. Our recently launched mobile app has gained significant traction thereby helping us build a robust distribution ecosystem. With successful completion of our technology transformation, we are now a step ahead to offer a delightful customer experience with innovative and personalized journeys."

Poonawalla Fincorp Share Price Target

Deven Mehata - Equity Research Analyst at Choice Broking said, POONAWALLA, currently trading at 505 levels, has recently demonstrated notable strength by breaking out above the crucial 500 levels, a move substantiated by robust trading volumes. This breakout suggests a renewed bullish sentiment in the stock, further validated by its trading position above key moving averages-namely, the short-term (20 Day), medium-term (50 Day), and long-term (200 Day) Exponential Moving Averages (EMAs).

The momentum indicator, Relative Strength Index (RSI), provides additional confirmation, having rebounded from lower levels and presently trading at 73, indicating strong positive momentum. The stock has identified a robust support zone around 470 levels, in proximity to its 20 Day EMA, offering a strategic level for stop-loss placement, particularly for investors holding from lower levels.

While the stock currently trades at all-time highs, prudent investors may consider booking partial profits while maintaining a long-term perspective. Fibonacci Extension analysis indicates a short-term target of 530, with a long-term target extending to 650, presenting a favourable risk-reward scenario.

Investors should remain vigilant for potential buying opportunities on any temporary pullbacks, as the overall technical outlook suggests continued positive momentum in POONAWALLA.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.