POONAWALLA FINCORP 2023-24 Annual Report Analysis

Tue, 25 Jun

POONAWALLA FINCORP has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during the year 2023-24.

POONAWALLA FINCORP Income Statement Analysis

• Interest income during the year rose 60.4% on a year-on-year (YoY) basis.
• Interest expenses were up by 59.6% YoY during the same period.
• Operating expenses increased by 29.4% YoY during the year.
• The company's net interest income (NII) increased by 60.7% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 9.3% in FY24 as against 8.5% in FY23.
• Other income increased by 12.7% YoY during the year.
• Net profit for the year increased by 190.3% YoY.
• Net profit margins during the year increased to 53.1% in FY24 from 29.3% in FY23.

POONAWALLA FINCORP Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	19,386	31,090	60.4%
Other Income	Rs m	5,091	5,740	12.7%
Interest Expense	Rs m	5,953	9,503	59.6%
Net Interest Income	Rs m	13,433	21,587	60.7%
Operating Expense	Rs m	10,474	13,557	29.4%
Pre-provision Operating Profit	Rs m	8,050	13,770	71.0%
Provisions & Contingencies	Rs m	0	0	0.0%
Profit before tax	Rs m	7,510	21,342	184.2%
Tax	Rs m	1,812	4,827	166.4%
Profit after tax	Rs m	5,688	16,512	190.3%
Minority Interest	Rs m	-11	-3	70.5%
Net Interest Margin	%	8.5	9.3
Net profit margin	%	29.3	53.1

Don't Miss: Key Information for Long-term Investors

POONAWALLA FINCORP Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 0 m as compared to Rs 0 m in FY23, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 220.5 bn as compared to Rs 152.2 bn during FY23, a rise of 44.9%.
• Cost of deposits for POONAWALLA FINCORP rose 18.5% and stood at 960.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 10.6 bn during the year from Rs 6.4 bn in FY23.
• Borrowing stood at Rs 59.3 bn, a growth of 53.2% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 239.2 bn as against Rs 231.7 bn during FY23, thereby witnessing a rise of 3.2%.

POONAWALLA FINCORP Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	67,427	81,036	20.2%
Advances	Rs m	152,185	220,464	44.9%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	810.0	960.0
Investments	Rs m	6,351	10,640	67.5%
Borrowings	Rs m	38,744	59,336	53.2%
Total Assets	Rs m	231,729	239,235	3.2%

Current Valuations for POONAWALLA FINCORP

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.4, an improvement from the EPS of Rs 7.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 417.5, stands at 18.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 4.0 times, while the price to income ratio stands at 10.0 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	25.2	40.3
Earnings per share (Unadj.)	Rs	7.4	21.4
Diluted earnings per share	Rs	7.3	21.3
Avg P/E ratio	Rs	37.3	18.8
Avg P/ABV ratio	Rs	3.9	4.0
Avg Market Cap	Rs	212,299	310,282
Dividends per share (Unadj.)	Rs	2.00	2.00

Ratio Analysis for POONAWALLA FINCORP

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 22,046,410.0x during FY24, from 15,218,530.0x during FY23. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio increased and stood at 0.73x during FY24, from 0.57x during FY23. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): POONAWALLA FINCORP's capital adequacy ratio (CAR) was at 33.8% as on 31 March 2024 as compared to 38.9% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company improved and stood at 20.4% during FY24, from 8.4% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at 6.90% during FY24, from 2.45% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 14.96% during FY24, from 7.93% during FY23. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. POONAWALLA FINCORP's gross NPA ratio stood at 0.0% as of 31 March 2024 compared to 0.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of POONAWALLA FINCORP was 0.6% in financial year 2024. This compared with 0.8% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	15,218,530.0	22,046,410.0
Debt to Equity Ratio	x	0.6	0.7
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	38.9	33.8
Return on Equity	%	8.4	20.4
Return on Assets	%	2.5	6.9
Return on Capital Employed	%	7.9	15.0
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	0.8	0.6
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how POONAWALLA FINCORP has performed over the last 5 years, please visit here.

POONAWALLA FINCORP Share Price Performance

Over the last one year, POONAWALLA FINCORP share price has moved up from Rs 340.7 to Rs 417.5, registering a gain of Rs 76.8 or around 22.5%.

Overall, the S&P BSE SENSEX is up 21.8% over the year.

(To know more, you can check out historical annual results for POONAWALLA FINCORP here and quarterly results for POONAWALLA FINCORP here)