Rs 15 to Rs 243: Investment of Rs 1 lakh in this stock two years ago would have turned to Rs 15.25 lakh today!

Compared to the returns delivered by the S&P BSE 500, the company has delivered over 17.88 times the index returns in the last two years.

Change in a name and management can be a big trigger in the stock market. One such case is Poonawalla Fincorp Ltd (PFL). Magma Fincorp’s (MFL) ownership and management went a change after the Poonawalla group bought a 60% stake in the company. It is now a subsidiary of Rising Sun Holdings Pvt Ltd (owned and controlled by Adar Poonawalla), after the raising of equity funds of Rs 3,456 crore on 06 May 2021. Post the capital infusion and reconstitution of the Board with Adar Poonawalla taking over as Chairman, Poonawalla Fincorp Ltd (PFL) has strengthened its management team across verticals. It has shifted focus to the consumer and small business segments along with discontinuation of non-focus products.

PFL has turned into a multibagger stock and has delivered phenomenal returns to its shareholders in the last two years. These returns are more than 17.88 times the returns delivered by the S&P BSE 500 index, of which the company is a part.

PFL is a non-deposit-taking NBFC registered with the RBI as an asset finance company. Having started its operations in 1988, it offers a bouquet of financial products, including loans for utility vehicles & cars, commercial vehicles, construction equipment, used commercial vehicles, agricultural finance, and SME loans. It also operated in the affordable housing finance segment through its wholly-owned subsidiary Poonawalla Housing Finance Limited (PHFL) since February 2013 and has a presence in general insurance business in partnership with HDI through MHDI since October 2012.

For the latest quarter the company reported a consolidated net profit of Rs 119 crore, on the back of strong operational performance in the March quarter (Q4FY22). Same quarter last year company posted a loss of Rs 648 crore. The company’s asset under management (AUM) grew 16.5% year-on-year (YoY) and 8.9% quarter-on-quarter (QoQ) at Rs 16,579 crore. Housing subsidiary (PHFL) crossed the Rs 5,000 crore AUM mark in March 2022. Besides that, net interest margin (NIM) improved 33 bps YoY and 77 bps QoQ at 9.5%.

At 2.50 pm, the shares of PFL were trading at Rs 250.25, with a gain of 2.87 % from the previous day’s closing price of Rs 243.75 on BSE. The stock has a 52-week high and low of Rs 343.8 and Rs 127.6, respectively on BSE.