💰 Financial Performance

Revenue Growth by Segment

Net interest income including fee and other income reached INR 905 Cr in Q2FY26, growing 17.8% QoQ. Segment-wise AUM growth shows Loan Against Property (LAP) grew 136% YoY and 23% QoQ, while Business Loans grew 54% YoY and 8% QoQ. New product disbursements contributed 17% to total disbursements in Q2FY26, up from 11% in Q1FY26.

Geographic Revenue Split

The company focuses on urban and semi-urban geographies. The Commercial Vehicle (CV) business expanded its footprint from 27 locations in June 2025 to 49 locations by September 2025, representing an 81% increase in geographic reach within one quarter.

Profitability Margins

Net Interest Margin (NIM) improved to 8.4% in Q2FY26 from 8.32% in Q1FY26, an uptick of 8 basis points. Return on Total Assets (ROTA) was 0.67% (annualized) in Q1FY26, recovering from -0.33% in FY25. Pre-provisioning operating profit (PPOP) stood at INR 387 Cr, up 19.1% QoQ.

EBITDA Margin

Operating efficiency is reflected in the Opex to AUM ratio, which remained stable at 4.8% in Q2FY26 despite heavy investments in distribution and technology. PPOP growth of 19.1% QoQ outpaced AUM growth of 15.6%, indicating improving operating leverage.

Capital Expenditure

The company is in an intensive investment phase, expanding its branch network to 260+ locations and increasing its employee base to 5,081. A significant capital infusion of INR 1,500 Cr was completed in Q2FY26 through a preferential issue to the promoter group to support a planned 5x-6x AUM growth over five years.

Credit Rating & Borrowing

Maintains 'CARE AAA; Stable' and 'CRISIL AAA; Stable' ratings. The cost of borrowings dropped to 7.69% in Q2FY26 from 8.04% in Q1FY26, driven by a 5% increase in long-term borrowing share (to 80%) and higher capital market participation.

⚙️ Operational Drivers

Raw Materials

As a financial services entity, the primary 'raw material' is capital/debt. Cost of borrowings represents the main operational cost at 7.69%. Variable rate borrowings constitute 55% of the liability mix, while capital market borrowings account for 10%.

Import Sources

Not applicable as the company is an NBFC; however, it sources debt capital from domestic capital markets and banking institutions.

Key Suppliers

Key financial backers include the promoter group, Rising Sun Holdings Private Limited, and various domestic banks and institutional investors in the debt market.

Capacity Expansion

Current AUM is INR 47,701 Cr as of September 2025. The company plans to expand AUM by 5x-6x from FY24 levels over the next five years. Distribution capacity reached 10,000 dealer touchpoints in September 2025, with a target of 12,000 by the end of FY26.

Raw Material Costs

Interest expenses are the primary cost. The company successfully reduced its borrowing cost by 35 basis points QoQ to 7.69% in Q2FY26 by diversifying its resource profile and leveraging its AAA rating.

Manufacturing Efficiency

Efficiency is measured by digital adoption; 94% of consumer durable customers in September 2025 were onboarded via PFIN EMI cards. Credit AI has achieved full adoption in the Personal Loans business.

Logistics & Distribution

Distribution is driven by a network of 450+ channel partners and 10,000+ dealer touchpoints, facilitating INR 750 Cr in new product disbursements in September 2025 alone.

📈 Strategic Growth

Expected Growth Rate

40-45%

Growth Strategy

Growth will be achieved by scaling new products (Prime PL, CV loans, Consumer Durables) which already contribute 17% of disbursements. The company is leveraging a 'phygital' model, expanding dealer touchpoints to 12,000, and using 45 AI projects to drive cross-selling to an expanding customer franchise of 10-15 lakh customers.

Products & Services

Loan Against Property (LAP), Business Loans, Personal Loans, Pre-owned Car Finance, Machinery Loans, Education Loans, Commercial Vehicle (CV) Loans, Gold Loans, Consumer Durable Loans, and PFIN EMI cards.

Brand Portfolio

Poonawalla Fincorp, PFIN EMI card, Cyrus Poonawalla Group.

New Products/Services

New products launched in the last 5-6 months (including Prime PL and CV loans) contributed INR 750 Cr to September 2025 disbursements, representing 17% of the quarterly total.

Market Expansion

Expanding CV business from 49 to more locations and increasing dealer touchpoints for consumer durables to 12,000 by year-end FY26.

Market Share & Ranking

Not specifically ranked, but AUM growth of 68% YoY indicates aggressive market share acquisition in the NBFC sector.

Strategic Alliances

Onboarded several major mobile and consumer durable OEMs to facilitate point-of-sale financing and EMI card adoption.

🌍 External Factors

Industry Trends

The industry is shifting toward 'phygital' models and AI-led lending. PFL is positioning itself by automating 16 AI projects and achieving 94% digital card adoption among new consumer durable customers to stay ahead of traditional NBFCs.

Competitive Landscape

Competes with other retail and MSME-focused NBFCs and private banks. Competitive edge is maintained through faster AI-led decision-making and a massive 10,000+ dealer distribution network.

Competitive Moat

Moat is derived from the 'Poonawalla' brand and the backing of the Cyrus Poonawalla Group (Serum Institute), providing high financial flexibility and a low cost of funds (7.69%). This AAA-rated status is a durable advantage in a high-interest-rate environment.

Macro Economic Sensitivity

Highly sensitive to domestic GDP growth and interest rate cycles. Management expects momentum from GST reforms and potential CRR/repo rate cuts to support its 68% YoY AUM growth.

Consumer Behavior

Increasing preference for instant digital credit and EMI cards at point-of-sale, which PFL is capturing through its PFIN EMI card and 10,000 dealer touchpoints.

Geopolitical Risks

Limited direct exposure, though environmental factors affecting specific asset classes in the portfolio could indirectly impact credit risk.

⚖️ Regulatory & Governance

Industry Regulations

Registered as a non-deposit taking systemically important NBFC (ND-SI-NBFC) with the RBI. Must maintain capital adequacy buffers; current tangible net worth is INR 7,983 Cr with a gearing of 3.72x.

Environmental Compliance

Direct environmental risk is low due to the service-oriented model, but the company monitors ESG risks within its loan portfolio.

Taxation Policy Impact

Operates under standard Indian corporate tax laws for NBFCs; indirect tax automation is being implemented to manage state-level input tax credit distribution.

Legal Contingencies

No reported instances of data breaches or regulatory penalties. The company has a robust grievance redressal mechanism and a board with 80% independent directors to manage governance risks.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the lack of seasoning of the new loan book, which grew 68% YoY. Potential credit cost spikes in these new segments could impact the 1.59% GNPA target.

Geographic Concentration Risk

Primarily focused on Indian urban and semi-urban markets; expansion into 49 locations for CV business indicates a strategy to diversify geographic risk.

Third Party Dependencies

Significant dependency on 10,000+ dealer outlets for the consumer durable business and 450+ channel partners for CV loan sourcing.

Technology Obsolescence Risk

Mitigated by aggressive digital transformation, including 45 AI projects and the automation of finance operations (LCR computation, tax distribution) over the next 9-12 months.

Credit & Counterparty Risk

Asset quality is currently stable with GNPA at 1.59% and NNPA at 0.81%. Stage 1 assets comprise 97.1% of the book, indicating high receivables quality.