Poonawalla Fincorp Q2 profit jumps to Rs 375 crore as credit costs ease

Non-banking lender Poonawalla Fincorp reported a net profit of Rs 374.85 crore for the July to September quarter of 2026-27 (Q2 FY27), about five times the Rs 74.20 crore it earned a year earlier. The company announced its results on Friday, October 9, 2026. Profit was also up from about Rs 308 crore in the April to June quarter. Assets under management (AUM) rose 10.4% from the previous quarter to Rs 74,008 crore, while net interest margin widened to 9.26% and stressed loans eased.

The jump in profit looks very large partly because last year's base was low. This quarter, lower provisions, a wider margin and a growing loan book all pulled in the same direction. The sequential rise from about Rs 308 crore in the first quarter matters more for judging the trend, because it shows the improvement is continuing rather than being a one-off rebound.

Managing Director and Chief Executive Arvind Kapil attributed the better earnings to faster growth in assets, improved margins and fee income, and lower credit costs. He described the quarterly credit cost of 2.19% as a structural and stable first milestone, signalling that the company believes losses have settled at a manageable level.

The figures also say something about credit to households and small businesses. Non-banking lenders such as Poonawalla Fincorp serve retail and small business borrowers, including customers for gold loans. A 10% rise in assets in a single quarter, with a falling share of bad loans, suggests that demand for such credit is strong and that repayment is holding up. The rising share of gold loans and new products shows the company spreading its bets beyond its earlier core.

There are reasons for caution. The Reserve Bank of India raised its policy repo rate to 5.50% this week, which will push up funding costs for lenders, and fast loan growth can hide risks that show up only later.

Short-term: The results put Poonawalla Fincorp among the stronger performers in the early part of the quarterly results season and will be weighed by investors against the effect of higher interest rates.

Long-term: If credit costs stay near current levels while the loan book grows, the company can sustain higher returns, but it will need to manage funding costs as rates rise.

Who is affected: Shareholders and lenders of Poonawalla Fincorp, its borrowers, including small businesses and gold-loan customers, and the wider non-bank lending sector.

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