Poonawalla Fincorp Share Price: Despite Poonawalla Fincorp reporting a 555 per cent rise in its consolidated profit after tax, the shares of the non-banking finance company plunged more than six per cent on BSE on Monday in the first trading session posts Q2 results on BSE on Monday.

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The stock of the company closed down by 6.86 per cent, or Rs 25.80, at Rs 350.35.

The stock that closed at Rs 376.15 on Friday evening opened at Rs 384.85 on Monday morning and touched the day's high of Rs 384.95 soon before its downward journey started. 

Poonawalla Fincorp Q2 results

Poonawalla Fincorp on Friday evening announced its results for the September quarter, reporting a significant 555 per cent jump in its consolidated PAT to Rs 854.61 crore from Rs 130.44 crore Year-on-Year.

While the company's revenue from operations jumped to Rs 738.65 crore from Rs 455.21 crore YoY, it's net interest income jumped to Rs 475.1 crore from Rs 274.12 crore on a yearly basis.  

The company's Gross NPA reduced 41 bps to 1.36 per cent YoY and 6 bps quarter-on-quarter (QoQ), while its net NPA reduced 22 bps to 0.72 per cent YoY and 4 bps QoQ.

Its Net Interest Margin was at 11.42 per cent, an improvement of 106 bps YoY and 2 bps QoQ.

Brokerages' reports: Should you buy, hold, or sell Poonawalla Fincorp shares?

JM Financial has maintained a 'buy' rating on the company's shares.

It has also maintained its target price of Rs 480 with an upside/downside of 27.4 per cent.

In its commentary, JM Financial wrote that Poonawalla Fincorp has strong growth momentum across product lines while having a highly efficient P&L profile and stable asset quality.

The company's growth was led by unsecured products across business and individual customers (business loans, personal and consumer loans), which now form 57 per cent of AUM, the brokerage report said. 

Other brokerage, Anand Rathi has retained a 'buy' rating on the stock with a target price of Rs 501.

The brokerage says that the company's growth is driven by strong digital-driven AUM growth while it has the best-in class NIM and product offer build.

About the risks in investing in the company's shares, Anand Rathi says the company has higher slippages and less-than-expected loan growth.