Poonawalla Fincorp may hit ₹500: Analyst bullish on expansion
Poonawalla Fincorp, a leading non-banking finance company (NBFC), has been gaining attention in the market as it plans to expand its presence into Tier 2-3 cities by opening 400 new branches. The company is also working on boosting its digital and lean operations under the leadership of its new CEO, Arvind Kapil. This expansion plan and the overhaul of its operations have led an analyst to predict a target price of ₹475-500 in two months, with a stop-loss of ₹405.
In the year-to-date (YTD), the stock has already rallied by 44.8%, backed by NCD allotments and a hike in the promoter stake. This surge in the stock price has caught the attention of investors, who are now looking to capitalize on the potential growth opportunities in the company.
Expansion plans in full swing
Poonawalla Fincorp’s plan to expand into Tier 2-3 cities is a strategic move to tap into the growing demand for financial services in these regions. The company has identified these cities as underserved markets, with limited access to formal credit channels. By setting up new branches, Poonawalla Fincorp aims to bridge this gap and provide financial services to a larger customer base.
The company’s expansion plans are expected to be funded through a mix of internal accruals and external funding. In a recent interview, CEO Arvind Kapil mentioned that the company plans to raise funds through a combination of debt and equity. This funding will be used to support the growth of the company and to maintain its debt servicing capabilities.
Boosting digital and lean operations
In addition to its expansion plans, Poonawalla Fincorp is also working on improving its digital and lean operations. The company has identified the need to increase its digital presence and reduce its operational costs to remain competitive in the market. To achieve this, the company is investing in technology and automation, which will enable it to streamline its processes and reduce its dependence on manual interventions.
The company’s lean operations will also help it to reduce its costs and improve its profitability. By minimizing waste and improving its supply chain management, Poonawalla Fincorp aims to reduce its operational costs and increase its margins.
Analyst bullish on Poonawalla Fincorp
An analyst from a leading brokerage firm has predicted a target price of ₹475-500 for Poonawalla Fincorp in the next two months. The analyst believes that the company’s expansion plans and the overhaul of its operations will drive its growth and increase its profitability.
The analyst has also set a stop-loss of ₹405, which is a level below the company’s current stock price. This suggests that the analyst believes that the stock may experience some volatility in the short term but is likely to recover and reach its target price.
Why Poonawalla Fincorp’s stock is rallying
Poonawalla Fincorp’s stock has been rallying in recent months, backed by several positive developments. The company’s NCD allotments have been well-received by investors, who are looking to capitalize on the growth opportunities in the company.
The hike in the promoter stake has also boosted investor confidence in the company. The promoter’s increased stake in the company suggests that they are committed to its growth and are willing to invest in its future.
In addition to these factors, the company’s strong financial performance has also contributed to its stock’s rally. Poonawalla Fincorp has reported strong growth in its revenue and profitability in recent quarters, which has caught the attention of investors.
Conclusion
Poonawalla Fincorp’s plan to expand into Tier 2-3 cities and boost its digital and lean operations have led an analyst to predict a target price of ₹475-500 in two months. The company’s strong financial performance and the hike in the promoter stake have also boosted investor confidence in the company.
Investors who are looking to capitalize on the growth opportunities in Poonawalla Fincorp may consider buying the stock at its current price level. However, investors should also set a stop-loss to limit their potential losses in case the stock experiences some volatility in the short term.
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