NBFC stock in focus after net profit increases 309% YoY in Q4

Synopsis: Poonawalla Fincorp closed FY26 on a sharply stronger note, with Q4 PAT surging nearly 309% year-on-year to ₹255 crore and AUM crossing ₹60,348 crore, up 69.4%, as a deliberate pivot toward secured lending began delivering cleaner books, better margins, and improving profitability quarter after quarter.

For an NBFC that once leaned heavily on unsecured lending, the transformation has been methodical and deliberate, a calculated retreat from high-risk exposures and a patient rebuilding around collateral-backed products. The headline profits are hard to ignore, but what is more interesting and arguably more investable is the quiet structural shift happening underneath: cleaner books, improving margins, and asset quality finally moving in the right direction. 

With a market capitalization of approximately ₹38,361 crore, shares of Poonawalla Fincorp were trading around ₹450 on May 6, 2026, with a 52-week range of ₹570.40 to ₹361.20 and a P/E of approximately 72x. 

Q4 FY26 and Full-Year Financial Performance

The quarterly numbers were a clean beat across the board. Net interest income came in at ₹1,276 crore for Q4 FY26, up 78.5% year-on-year and 18.2% sequentially. Pre-provision operating profit jumped 109% year-on-year to ₹695 crore. PAT for the quarter stood at ₹255 crore, up 69.6% from ₹150 crore in Q3 FY26 and a sharp recovery from just ₹62 crore in Q4 FY25. PAT for the quarter stood at ₹255 crore, a near 309% jump from ₹62 crore in Q4 FY25 and up 69.6% sequentially from ₹150 crore in Q3 FY26. Return on assets improved to 1.81%, up from 0.78% a year ago, while the cost-to-income ratio compressed to 45.6% from 53.4%. Operating leverage is finally kicking in.

For the full year, AUM crossed ₹60,348 crore, up 69.4% year-on-year. Total interest income for FY26 rose to ₹1,894 crore in Q4 alone, reflecting both book expansion and a healthier product mix. Credit costs showed signs of plateauing as legacy unsecured stress gradually works its way through the portfolio.

The Secured Lending Story

This is where the real narrative lives. The on-book secured mix now stands at 54%, and it is not just a number; it is showing up in credit costs and NPA trends. Gross NPA improved to 1.44% in Q4 FY26, down 40 basis points year-on-year and 7 basis points sequentially. Net NPA stood at 0.74%. Critically, management confirmed there were no accelerated write-offs during the quarter, which means the improvement is organic.

The 6-month-on-book delinquency metric, a forward-looking indicator of credit quality, has improved from 6.74% in Q1 FY25 to just 1.05% for the Q2 FY26 sourcing cohort. That is not a blip; it is a structural improvement in underwriting quality that has come from deliberately tightening customer selection and leaning into collateral-backed products. A loan against property, at ₹16,935 crore (28% of AUM), remains the largest segment, while gold loans, commercial vehicle loans, and education loans, all secured or quasi-secured, are scaling rapidly as new product engines.

New Products Gaining Traction

The six new products launched in FY26 collectively contributed 24% of incremental disbursements in Q4 FY26, up from 20% in Q3. Gold Loan, operating from 400 branches across seven states, averaged ₹273 crore in monthly disbursements during the quarter. Personal Loan Prime, targeting salaried customers of top corporates, averaged ₹440 crore per month. Commercial vehicle and education loans are also hitting their stride in disbursement run rates. New product AUM already stands at 14% of the total book.

AI and Capital

The company has deployed 42 of 76 planned AI solutions, spanning credit, collections, customer service, and HR. Thirty-plus GenAI and agentic AI solutions are now live. A ₹2,500 crore QIP completed in April 2026 pushes the proforma capital adequacy ratio to 20.74%, giving management a long runway to sustain the 35–40% AUM CAGR target without capital constraints.

Verdict

Poonawalla Fincorp is no longer a turnaround story; it is an execution story. The secured lending pivot has structurally improved the book’s risk profile; profitability is compounding quarter on quarter, and the new product portfolio is scaling without visible asset quality stress. At a trailing P/E of 110x, the valuation prices in significant growth delivery; the ask is whether management can sustain this trajectory through FY27. Given the evidence so far, that case is getting harder to dismiss.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post NBFC stock in focus after net profit increases 309% YoY in Q4 appeared first on Trade Brains.