Poonawalla Fincorp: 62% AUM growth, 47% unsecured

Poonawalla Fincorp Limited (NSE: POONAWALLA) grew its loan book 62.5% to ₹67,054 crore in Q1 FY27. Profit rose nearly fivefold to ₹308 crore, from ₹63 crore. What happened Net interest income, including fees, rose 84.3% to ₹1,415 crore. Pre provision profit grew 141.8% to ₹785 crore. Return on assets improved to 1.98% from 0.68%. Gross NPA fell to 1.37% from 1.84%, and net NPA to 0.70%. The cost to income ratio dropped to 44.6% from 57.7%. A ₹2,500 crore QIP in April cut leverage to 3.82 times. Secured loans are now 53% of the book, unsecured 47%. New products were 26% of disbursements. Why it matters Banks have pulled back from unsecured lending, and specialists are filling the gap. Poonawalla is building six new product lines into that gap. Retail is 84% of the book. My view Two numbers tell the story. First, the profit jump is off a small base. Last year's ₹63 crore came after a clean up, so fivefold flatters. Second, and more important, credit cost is 2.4% of average assets. That is in a benign phase, with half the book barely seasoned. If that cost rises by one percentage point on ₹67,000 crore, it takes about ₹670 crore before tax, which is over half the annual profit run rate. Fast unsecured growth always looks best before its first cycle. On price, the stock is near ₹469, about 3.2 times book, while return on equity is still in single digits. You are paying a premium multiple for returns that have not arrived yet. What I am watching Q2 FY27 results, credit cost trends, and seasoning in the new products. On the chart, ₹570 is the 52-week high and ₹430 is support. My stance: Hold. Add near ₹430. Judge this on credit costs, not on growth. Disclosure: I do not hold a position in Poonawalla Fincorp Limited at the time of writing. This is not investment advice.