Poonawalla Fincorp Q2 net profit back in green at ₹74 crore; AUM surges 68%, NII up 40%

Non-banking finance company (NBFC) Poonawalla Fincorp Ltd on Friday (October 17) posted a profit after tax (PAT) of ₹74.2 crore, compared with a loss of ₹471.0 crore in the same period last year and an increase of ₹62.6 crore quarter-on-quarter.

Net interest income (NII) for the quarter stood at ₹905 crore, reflecting a 40.3% increase YoY and a 17.8% rise QoQ. Profit before provisions (PPoP) grew 38.5% YoY and 19.1% QoQ to ₹387 crore. The company reported a net interest margin (NIM) of 8.40% in Q2 FY26, up from 8.32% in Q1 FY26.

The company maintained stable asset quality, with gross NPA (GNPA) declining to 1.59% in Q2 FY26 from 1.84% in the previous quarter. Net NPA (NNPA) stood at 0.81% compared with 0.85% in Q1 FY26. Stage 1 assets accounted for 97.1% of on-book assets in Q2 FY26, up from 96.5% in Q1 FY26. The provision coverage ratio (PCR) remained at 49.65%.

The company reported Assets Under Management (AUM) of ₹47,701 crore, up 68.0% year-on-year and 15.6% quarter-on-quarter. The company continued to record strong AUM growth across all products, with new products contributing 8% to total AUM. The secured on-book mix stood at 56%, while the ratio of secured to unsecured on-book assets was 56:44.

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Operating expenses relative to AUM remained stable at 4.8% despite ongoing investments in new businesses. Asset quality improved, with a 25 basis points reduction in Gross NPA to 1.59%, and no accelerated write-offs were undertaken during the quarter. Net NPA stood at 0.81%, with a provision coverage ratio (PCR) of 49.65% and stable credit cost at 2.67% of average AUM.

The company maintained a healthy capital adequacy ratio and enhanced its distribution reach, operating 260+ branches, including 160 gold branches as of the reporting date. Total borrowings as of September 30, 2025, were ₹35,717 crore, diversified across instruments and institutions. Poonawalla Fincorp reported an equity infusion of approximately ₹1,500 crore on a preferential basis by its promoters.

During Q2 FY26, Poonawalla Fincorp raised ₹2,355 crore through NCDs, including subordinate debt, to increase the proportion of long-term borrowings, with NCDs now contributing ~27% of total borrowings compared with 24% in June 2025.

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The company’s leverage remained low, with a debt-to-equity ratio of 3.64x, providing ample headroom for growth.  Liquidity as of September 30, 2025, stood at ₹6,261 crore in the form of cash, cash equivalents, and undrawn bank lines.

Arvind Kapil, Managing Director and CEO, Poonawalla Fincorp, said, "We delivered strong AUM growth this quarter, supported by increased contribution from our new business verticals. This reflects the successful execution of our diversification strategy. Improved liability management, particularly through cost-effective NCD issuances, strengthened our funding profile. We remain focused on driving sustainable growth with prudent risk management."

Shares of Poonawalla Fincorp Ltd ended at ₹526.20, down by ₹13.35, or 2.47%, on the BSE.