Emkay Global Recommends Buy This NBFC Stock, Shares Jumped 1357.87% In 3 Years

Renowned broking firm Emkay Global has a Buy on Poonawalla Fincorp with a Target Price of Rs 430/share. The brokerage claims a potential upside of 26% from its current level, considering the given target price.

Poonawalla Fincorp (formerly known as Magma Fincorp Limited) is a Cyrus Poonawalla group Non-Banking Finance Company (NBFC) that focuses on consumer and MSME financing. The company offer a diversified product suite to address the growing financing needs of our customers and enterprises. It is a midcap company with a market cap of Rs 26,316.43 Crore.

AUM to compound at 37% over FY23-26E; RoA to reach ~4.6%; we resume coverage on PFL with BUY and TP of Rs 430/share

Emkay Global said, "With an experienced management, competitive product suite, and right strategy in place, we expect disbursement growth of ~31% over FY23-26E for PFL which should translate into AUM growth of ~37% over the same period. With NIMs expected to expand, opexratios expected to decline, and credit costs likely to be moderate, we expect RoA/RoE of 4.6%/15.2% in FY26E. We resume coverage on PFL with a BUY recommendation and Jun-24E TP of Rs430/sh (earlier Rs300), which implies Jun-25E P/ABV of 3.0x."

Key risks: Any shocks in the current uncertain macro environment can result in growth slowdown as well as deterioration in asset quality, especially given the larger unsecured portion of PFL's book.

Stock Movement

On Monday, the shares of Poonawalla Fincorp rises 0.50%, ended at Rs 342.60/share on BSE. It traded its 52-week high on Jun 21, 2023, at Rs 366.20/share and 52-week low on Jul 01, 2022, at Rs 224.05/share, respectively.

The shares performed positively in the past 10 years, given positive returns multibagger return. Shares jumped 1.71% in 1 week. In the past 1 year, shares jumped 48.47%. While in the past 2 years, the shares surged 123.34%. In 3 years, the shares gave a multibagger return of 1357.87%. In 5 and 10 years, the shares jumped 111.94% and 268.98%, respectively.

Disclaimer

The stock has been picked from the brokerage report of Emkay Global. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.