Poonawalla Fincorp Receives 'Hold' Rating After Strong Q1 Results

Poonawalla Fincorp, a leading finance and non-banking financial company (NBFC), has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company declared very positive results for the quarter ending March 2024, with a growth in net profit of 25.1%. This marks the 11th consecutive quarter of positive results for the company.
The company's net sales for the quarter were at an all-time high of Rs 915.00 crore, while its PBDIT (Profit Before Depreciation, Interest, and Taxes) stood at Rs 673.73 crore, also the highest in the company's history. The company's PAT (Profit After Tax) for the quarter was at Rs 331.70 crore, showing a growth of 48.9%.

Despite these positive results, the technical trend for the stock is currently sideways, indicating no clear price momentum. However, the trend has improved from mildly bearish to generate a return of 3.14% since the upgrade on July 1, 2024.

With a ROE (Return on Equity) of 12.7, the stock is currently fairly valued with a price to book value of 4. The stock is also trading at a discount compared to its historical valuations. In the past year, while the stock has generated a return of 23.76%, its profits have risen by 75.8%, resulting in a PEG (Price/Earnings to Growth) ratio of 0.4.

The majority shareholders of Poonawalla Fincorp are the promoters, indicating their confidence in the company's growth potential. However, the company has shown poor long-term growth with a net sales growth rate of only 4.84% annually.

In the last year, the stock has underperformed the market, generating a return of 23.76% compared to the market's return of 37.64%. This may be a cause for concern for investors, but with the recent positive results and a 'Hold' rating from MarketsMOJO, the stock may still hold potential for future growth.