Shares of Poonawalla Fincorp Ltd declined by 1.1%, closing at ₹380.9 on the NSE on September 9, after the company announced the resignation of Chief Technology Officer (CTO) Dhiraj Saxena.
The resignation, submitted on September 5, was disclosed to the stock exchanges, causing the market to react negatively. Investors looking to buy shares online may view this as a point of concern, particularly due to leadership changes in key positions.
Resignation and financial updates
The sudden departure of Dhiraj Saxena has come at a time when Poonawalla Fincorp is actively making financial decisions to strengthen its operations. On Friday, the company's Finance Committee approved the issuance of 42,500 secured, redeemable, non-convertible debentures (NCDs) through private placement.
Each debenture, valued at ₹1,00,000, totals ₹425 crore and carries an 8.2% annual interest rate. This move could make the company more attractive to those interested in debt investment, even as others may opt to buy shares online to capitalise on stock market fluctuations.
Long-term debt strategy
These NCDs, listed on the BSE's wholesale debt market, have a five-year tenure, maturing on September 5, 2029. Despite the CTO's exit, Poonawalla Fincorp is focused on its long-term strategies, including managing its debt profile efficiently. Investors can track this strategy as they consider whether to buy shares online during periods of stock price fluctuation.
Impressive revenue growth
In the June quarter, Poonawalla Fincorp showcased significant financial growth, with total revenue from operations rising by nearly 41% to ₹977.59 crore, compared to ₹693.48 crore during the same quarter in the previous fiscal year. Sequentially, revenue increased by 7% from ₹915 crore in the March quarter of FY24. This impressive growth may serve as an incentive for potential investors to buy shares online, given the company's improving financial performance.
Profit margins under scrutiny
The company's consolidated profit-after-tax for Q1FY25 saw a 29% year-on-year increase, reaching ₹291.64 crore, up from ₹225.99 crore in Q1FY24. However, quarter-on-quarter, the company's profit dropped by 12% from ₹331.7 crore in Q4FY24.
While this dip may cause some hesitation, the long-term revenue growth trajectory still positions Poonawalla Fincorp as a viable option for those looking to buy shares online.
Share performance: A mixed bag
Over the past year, Poonawalla Fincorp shares have seen a gradual decline, dropping by more than 4%. The stock is down nearly 15% Year-To-Date (YTD) and over 21% in the past six months.
For investors considering whether to buy shares online, the current stock price may present an opportunity to enter the market at a lower valuation, especially if the company's future performance remains robust despite leadership changes.
Time to take advantage of market movements?
The resignation of CTO Dhiraj Saxena has temporarily affected Poonawalla Fincorp's stock price, but the company's solid financial growth and strategic moves to raise capital through NCDs offer the potential for recovery. Investors looking to buy shares online should consider both the short-term market reactions and the long-term financial outlook before making decisions.
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