Poonawalla Fincorp Limited announced the transcript of its Earnings/quarterly conference call for Q4 FY2024-25 and FY25, held on Friday, April 25, 2025.
Key highlights discussed by management (Mr. Arvind Kapil, MD & CEO, and others) include:
- AUM grew by 42.5% year-on-year and 15% quarter-on-quarter, reaching ₹35,631 crore as of March 31, 2025, exceeding the initial guidance.
- Total disbursements for Q4 FY2024-25 stood at ₹9,378 crore, up approximately 31% quarter-on-quarter.
- The company has successfully launched all 6 planned businesses for Q1 FY2025-26 ahead of schedule, focusing initially on quality processes.
- PL Prime, launched in August 2024, scaled from ₹0 to over ₹200 crore AUM by March 2025, attracting high-quality borrowers.
- Launched industry-first 24x7 digital journeys for external customers, expecting significant gains in the next 3-4 quarters.
- Existing businesses like LAP (₹8,466 crore book, 107% YoY growth) and Business Loan (₹5,728 crore, 47% YoY growth) showed healthy growth with prudent risk calibration.
- Operating costs are expected to increase by approximately ₹50 crore per quarter due to new business launches and planned branch expansion (400 branches in next 4 quarters), but expected to stabilize as a percentage of AUM by Q4 FY2026-27 (corrected to March 2026).
- Significant focus on technology and AI: identified as a key competitive edge. Leveraging AI across marketing, credit underwriting (35-40% efficiency gain), debt management (sharper risk assessment, faster customer reach), audit, compliance, HR, IT, and operations. Updates provided on 7 previously announced AI projects and plans for 18 further incremental projects.
- Robust liability management strategy with focus on diversifying borrowing sources. Recently raised ₹1,525 crore through NCDs in April 2025, increasing NCD contribution to 12% of total borrowings.
Risk management updates (Mr. Shriram Iyer, Chief Credit and Analytics Officer) included:
- First EMI bounces improved by over 25% quarter-on-quarter.
- Overall credit cost reduced by 27% from ₹348 crore in Q3 FY25 to ₹253 crore in Q4 FY25.
- The erstwhile STPL portfolio reduced significantly to 8% of AUM by March 2025, with 80% being zero DPD, indicating the issue is addressed.
- Q4 FY25 policy write-off was ₹141 crore, with no accelerated write-off (compared to ₹520 crore total write-off including ₹163 crore accelerated in Q3 FY25).
- Credit cost for erstwhile STPL reduced by 33% quarter-on-quarter to ₹137 crore in Q4 FY25.
- Strengthening risk management framework through recalibration, monitoring new digital products using alternate data, increasing secured product mix, launching AI-powered credit decisioning (partnered with IIT Mumbai), leveraging in-house models, and transforming debt management with advanced analytics and technology.