Home / Markets / Stock Markets /  This Adar Poonawalla company has turned multibagger, shares up over 300% this year

Poonawalla Fincorp share price has risen from 30 per share level in August 2020 to over 180 level currently as the multibagger stock has skyrocketed more than 500% in a year and has rallied nearly a whopping 340% this year (year-to-date) alone. Poonawalla Fincorp, earlier known as Magma Fincorp, is a Poonawalla group non-banking finance company (NBFC) that focuses on consumer and MSME financing. 

Adar Poonawalla, the CEO of Serum Institute of India (SII), is also the chairman of Poonawalla Fincorp. Non-banking finance company (NBFC) Magma Fincorp Ltd (Magma) in July had announced that it has changed its name to Poonawalla Fincorp Limited effective 22 July, 2021, following the acquisition of controlling stake by Adar Poonawalla-led Rising Sun Holdings Private Limited.

On a consolidated basis, the company’s profit before tax (PBT) for Q1FY22 was 81 crore and assets under management (AUM) stood at 14,424 crore. The company witnessed a surge in disbursements aided by sufficient adequacy and product diversity.

Brokerage firm Emkay Global sees further upside on Poonawalla Fincorp stock as it said that the company is well placed in terms of adequacy, promoter backup and liquidity. "We continue to believe that Poonawalla Fincorp is well placed in terms of adequacy and liquidity. New management plans to diversify the current portfolio by making an effective mix of secured/unsecured products, i.e. affordable housing, pre-owned cars and business loans from current offerings, and new offerings like LAP, PL, loans to professionals,'' it said in a note. The brokerage has a Buy rating on the stock with a target price of 195 per share.

With the change in guard, Emkay believes that the company will see superior profitable growth, resulting in a significant improvement in return ratios. It sees probable rating upgrades, lower cost of funds and ability to inject equity by the promoter (without fear of forced dilution) as the key positives.

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