FY25 AUM Growth: 30-35% YoY
First year AUM growth target of 30-35% YoY as management focuses on consolidating existing businesses and reviewing risk management processes before scaling.
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Poonawalla Fincorp · forward-looking guidance across the available source record.
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growth
5-Year AUM CAGR: 35-40%
Management targets 35-40% annual AUM growth over the next five years, aiming to scale the book by 5-6 times in 5-6 years.
Profitability Mirroring AUM from Year 3
Arithmetic mean of profitability growth expected to align closely with AUM growth projections starting from third year after foundation building.
Cost of Funds Stable
Cost of borrowing expected to remain in similar range in future quarters despite MCLR increases by banks; 70% of borrowings are variable rate.
AUM Growth Guidance Upgrade
Management expects FY26 AUM growth to exceed the earlier guided 35-40% range, reflecting strong credit-calibrated growth momentum across existing and new products.
NIM Target of ~9% in 4 Quarters
Net Interest Margin expected to return to approximately 9% within the next three to four quarters as the newly calibrated STPL book scales up and older high-yield legacy book is gradually reduced.
Credit Cost Guidance of 1.5%-2%
Steady-state credit cost guidance maintained at 1.5%-2% range. Management internally targets noteworthy year-on-year improvement with further reduction over 2-3 years for sustained profitability.
400 Gold Loan Branches by March 2026
Gold Loan expansion on track with 80 branches already operational. Target of 400 branches by March 2026, with 95% in tier-2 and tier-3 cities. Break-even expected in 11-13 months per branch.
30-40% AUM Growth for Next Five Years
Management reaffirmed its long-term AUM growth target of 30-40% annually over the next five years, driven by product expansion and geographic deepening in T2/T3 markets.
400 New Branches by FY26
The company plans to expand from approximately 101 branches to 500+ branches over the next financial year, focused on T2/T3 locations with 12-15 month breakeven timelines and heavy cross-sell into core businesses.
Six New Products by Q1 FY26
Product portfolio will expand from 4 to 10 products (Prime PL already launched, consumer durables, shopkeeper loans, used commercial vehicles, gold loans, education loans) with budgets finalized and business heads hired.
INR 50 Crore Quarterly Investment for Six Quarters
Technology, distribution, and people investments estimated at INR 50 crore per quarter over the next six quarters (INR 300+ crore total) to fund the franchise buildout, viewed as foundational for future growth and profitability.
Gold Loan Branch Expansion to 400 by March 2026
Targeting 400 Gold Loan branches by March 2026, with 95% in tier-2 and tier-3 markets as multi-product distribution points, growing from current 160 branches.
Consumer Durable Distribution to 12,000 Dealer Points
Confident to reach 12,000 dealership distribution points by end of FY2026 from current 10,000+, significantly ahead of initial expectations.
NCD Share to Reach 30-35% of Borrowings
NCD share in borrowing mix has increased from 7% (March 2025) to ~27% (September 2025) and heading towards 30-35% steady state, improving cost of borrowing and liability diversification.
Best-in-Class Credit Cost Target
Stated objective to achieve best-in-class credit costs in the industry through calibration of new product mix, with normalized STPL book at ~2% of AUM and improved collection efficiency.
AUM Growth: 30-35% FY25, 30-40% thereafter with potential upside
Management reiterates FY25 AUM growth guidance of 30-35% and expects to exceed it. For subsequent years, the guidance range is 30-40%, with Arvind Kapil stating confidence that AUM growth will be 'a notch higher than guidance' given the building blocks in progress.
ROA trajectory of ~3.5% by FY27
Management guided that ROAs will be in the range of approximately 3.5% by the third year (FY27), with individual new products expected to deliver ROAs in the 3%-4.5% range. This is contingent on businesses reaching steady state after the investment phase.
Sequential decline in credit cost QoQ
Management stated confidence that credit costs will continue to decline quarter-over-quarter as legacy book issues are addressed and the new calibrated book scales. The new STPL book bounce ratios are down 50% and collections improved 380bps from Q2 to Q3.
Product launches: 24/7 Digital Prime PL in Q4 FY25, 7 products in Q1 FY26
Industry-first 24/7 Digital Prime Personal Loans for top corporate employees launching in next 15 days. Six new products (Gold Loan, Consumer Durable, Used CV, Shopkeeper Loans, Education Loans, Equipment Leasing) launching Q1 FY26 at Phase-1 locations with leadership and infrastructure already in place.
AUM growth guidance maintained at 35%-40%
Despite growth significantly outpacing guidance in recent quarters, management prefers to maintain the 35%-40% long-term AUM growth target, noting near-term periods may exceed this range.
NCD share target of 30%-35% of total borrowings
Management aims to increase NCD contribution to long-term borrowings from current ~33% to 30%-35% range, enhancing liability diversification and tenor match.
Direct channel to reach 40%-50% of commercial retail disbursements
Non-VSA in-house direct distribution channel currently at 22% of commercial retail disbursements is expected to scale to 40%-50% over time, improving profitability through lower cost-to-acquisition.
Conversational AI platform go-live by March 2026
Next-generation AI platform for omnichannel customer service targeting 80% autonomous resolution of voice and chat interactions, initially in Hindi and English with deployment across 6 regional languages thereafter.
AUM Growth: 35-40% YoY for FY26 onwards
Company achieved 42.5% YoY in FY25 and guides sustained 35-40% growth trajectory for FY26 and beyond, underpinned by strong distribution credibility and diversified product suite.
FY26-27 Profitability Guidance Stands
Management reiterates confidence on previously communicated robust profitability targets for FY26-27, citing improving credit costs and operational leverage from scaling new businesses.
Operating Cost Normalization by Q4 FY27
OpEx to AUM will temporarily inch higher in next 2 quarters due to 6 new business launches and 400 gold loan branches, then stabilize at prudent levels reflecting operational efficiencies and scalability by March 2027.
Capital Raise: Early CY26
Management indicated potential capital raise in early calendar year 2026 (financial year 2026-27) given 1,100 crore capital consumed during FY25 leaving CAR at 22.94% against robust growth plans.
AUM Growth Target: 35-40%
Management guided for 35-40% AUM growth in FY2027, potentially a notch better depending on macroeconomic conditions. This is supported by scaling gold branches, consumer durables, and digital loan products.
OpEx to AUM: Structural Decline
Internal benchmark to close FY2027 at a lower OpEx to AUM ratio than current 4.13%, though quarter-on-quarter fluctuations of 10-25bps may occur due to investment clustering and branch openings.
Digital Processing: 35-40% Target
PL Prime digital straight-through processing expected to increase from 33% to 35-40% over the next few quarters, adding operating leverage without corresponding overhead increases.