Brokerage firm UBS has initiated coverage on Poonawalla Fincorp Ltd. with a 'buy' rating and a price target of ₹640 per share. According to reports from CNBC TV18, this implies a potential upside of 38.9% from the stock's previous close of ₹460.5 per share. The brokerage highlighted that a strong management and promoter-driven AAA credit rating are key positives for the stock, with loan against property and gold loans identified as anchor products for the firm going forward.
As reported by CNBC TV18, UBS expects Poonawalla Fincorp's return on assets (RoA) to reach 2% by financial year 2028, supported by healthier margins and lower costs. The brokerage noted that at 2.4 times its September 2027 estimated price-to-book value (assuming capital is raised), the market is not fully capturing the company's potential growth trajectory and expansion in its RoA. The company's finance committee has also approved the issue of secured, redeemable, rated and listed non-convertible debentures (NCDs) worth up to ₹1,000 crore via private placement.
According to CNBC TV18, shares of Poonawalla Fincorp ended the previous session 1.6% lower at ₹460.5 per share. The stock has demonstrated strong performance with a 13.9% rise in the past month and 62.75% increase in the past year. Among nine analysts covering the stock, four each have 'buy' and 'sell' ratings while one has a 'hold' rating. The company is looking at raising 1 lakh NCDs with a face value of ₹1 lakh each, aggregating to ₹1,000 crore.
As reported by CNBC TV18, UBS identified any delayed equity raising and weaker-than-expected asset quality as key risks for the stock. The debentures would be issued in dematerialised form and are proposed to list on the Bombay Stock Exchange (BSE). The company's finance committee has approved the issue of secured, redeemable, rated and listed non-convertible debentures (NCDs) worth up to ₹1,000 crore via private placement.
