Poonawalla Fincorp Q1 FY22 Profit before Tax up 72% to ₹ 81 Cr YoY Collections inching towards Pre-COVID levels. The Board of Directors of Poonawalla Fincorp Limited (PFL), today announced its un-audited results for the quarter ended June 30, 2021 (Q1FY22).
On a consolidated basis, the Company’s profit before tax (PBT) for Q1FY22 was ₹ 81 crore and Assets under Management (AUM) stood at ₹ 14,424 crore.
Performance Highlights (Consolidated)
AUM remained flat at ₹ 14,424 crore on QoQ basis due to COVID-19 restrictions across the country.
Q1FY22 NIM increased by 107 bps to 7.92% in Q1FY22 from 6.85% in Q1FY21.
Consolidated PBT increased by 72% to ₹ 81 crore in Q1FY22 from ₹ 47 crore in Q1FY21
RoA increased to 1.80% in Q1FY22 from 0.90% in Q1FY21.
Capital Adequacy Ratio (CAR) increased to 57.8% in Jun’21 from 20.3% in Mar’21.
At a consolidated level, the collections which dipped to 84% in Apr’21 and fallen further to 80% in May’21 owing to COVID-19 restrictions across the country, recovered to 93% in Jun’21 and have further improved to 98% in Jul’21.
Gross Stage 3 and Net Stage 3 have reduced from 5.8% and 3.7% as at Q1FY21 to 5.4% and 2.7% as at Q1FY22 respectively on a consolidated basis. The Company has one of the best provision coverage ratios across all three stages. Standard asset coverage ratio stands at 4.5% vs 2.5% in Jun’20; Stage 3 asset coverage ratio standsat
51.0% vs 36.3% in Jun’20.
The Company has continued the process of risk assessment on its credit exposures as of 30th June 2021, and accordingly, in addition to the model determined Expected Credit Loss (ECL) provision, it carries a management overlay of ₹ 283 crore (2.0% of AUM) against any future potential impact of COVID-19, which in management
assessment is adequate to cover the impact of COVID-19 wave 3 on the consolidated loan portfolio.
Liquidity and Cost of Borrowings
The Company continues to maintain a strong liquidity position with around ₹ 3,238 crore of surplus liquidity, apart from undrawn sanctions in hand of ₹ 625 crore. Repricing of existing borrowings is underway and is expected to bring significant cost savings over the next few quarters. Currently the company is doing its incremental borrowings at sub 7%.
Capital Infusion and Rebranding
After the capital infusion of ₹ 3,456 crore in May’21, rebranding of Magma to Poonawalla has been completed. W.e.f. July 22, 2021, Magma Fincorp Limited has been renamed to Poonawalla Fincorp Limited and the Company’s subsidiary, Magma Housing Finance Limited has been renamed to Poonawalla Housing Finance Limited. Consequently, PFL has become a subsidiary of Rising Sun Holdings Private Limited (RSHPL) and PHFL a step-down subsidiary of RSHPL.With the infusion of capital, the Company’s Capital Adequacy ratio increased to
57.8%in Jun’21 from 20.3% in Mar’21 and leverage fell to 1.3x in Jun’21 from 4.8x in Mar’21.
Strengthening of Leadership Team
The company has undertaken strengthening of its leadership team as a part of the transformation exercise. It has roped in various industry leaders through a string of top executive hirings across the functions. This is in line with company philosophy of making it a professionally run organization with a strong governance culture. The
company continues to invest in building the top leadership team along with a strong middle management team to build a robust execution focus.
Technology and Digital Initiatives
The company has undertaken a complete transformation of the technology infrastructure with implementation of state-of-the-art Unified Loan Origination System (LOS), Loan Management System (LMS) and Customer Relationship Management (CRM) platforms. The company is moving its technology to a cloud-based
infrastructure to ensure scalability.