The "Cost of Funds" refers to the expenses financial institutions pay to obtain and keep the money necessary for lending. It includes more than just interest on deposits, also factoring in dividends on equity shares and related expenses. Stable incremental cost of funds helps companies navigate economic ups and downs, demonstrating their ability to handle different factors in shifting market conditions.

1. Unraveling The Intricacies Of
Cost Of Funds And Cost Of
Borrowing

2. The "Cost of Funds" refers to the expenses financial institutions
pay to obtain and keep the money necessary for lending.
It includes more than just interest on deposits, also factoring in
dividends on equity shares and related expenses.
Stable incremental cost of funds helps companies navigate
economic ups and downs, demonstrating their ability to handle
different factors in shifting market conditions.

3. The Cost Conundrum Unveiled
Abhay Bhutada, MD of Poonawalla Fincorp, explains that despite changes in
market conditions like the Reserve Bank of India's policy tightening and rising
interest rates, the incremental cost of funds remains steady at 8%. Even though
the average cost of borrowing for the quarter is close at 7.99%, Bhutada
reassures that there is no noticeable effect on the total cost of funds.

4. Deciphering Cost Of Funds
Cost of funds, a critical metric in the financial
landscape, constitutes the array of expenses
shouldered by financial institutions to both
secure and sustain the capital essential for their
lending activities.
This multifaceted measure goes beyond the
simple interest paid on deposits, encompassing
a broader spectrum that includes dividends on
equity shares and various associated costs.
The intricacies of managing this comprehensive
financial structure require a delicate balance,
where institutions must navigate through the
dynamic currents of market fluctuations and
economic challenges.

5. The steady incremental cost of
funds at Poonawalla Fincorp
showcases its skillful management
of financial complexities.
Despite external challenges, the
institution displays resilience,
indicating its ability to navigate
economic uncertainties
strategically.
This stability isn't just about
numbers; it highlights Poonawalla
Fincorp's careful financial
management, demonstrating how it
has strengthened itself against
unpredictable changes in the
financial world.

6. The Quandary Of Borrowing Costs
Let's focus on borrowing costs, where Benjamin Graham's classic advice rings
true in financial analysis. In his famous book "Security Analysis," Graham
stresses the importance of examining a company's financial setup, particularly
its debt levels, ability to cover interest payments, maturity of debts, and
borrowing terms. He warns against companies with too much debt or risky
financial structures, as they could face stability and solvency issues in the
future.

7. Abhay Bhutada, in line with
Graham's principles, subtly
emphasizes the significance of
assessing a company's
borrowing habits.
Without saying it directly,
Bhutada's statement about
Poonawalla Fincorp's consistent
borrowing costs, even during
economic challenges, suggests a
strong financial setup.
It implies that Poonawalla
Fincorp has managed its
borrowing costs skillfully.

8. Numbers Speak Louder
In finance, numbers often speak louder than words. Bhutada's occasional
mention serves as a guide in our exploration. His careful insights not only
reveal Poonawalla Fincorp's performance but also provide insight into broader
financial trends.

9. The Symphony Of Financial Health
As we examine the details of cost of funds and cost of borrowing, we uncover
the factors that influence a company's financial well-being. The consistency in
Poonawalla Fincorp's incremental cost of funds and its ability to handle
borrowing costs demonstrate the institution's financial expertise.

10. Conclusion
In the changing world of finance, where uncertainties are common,
grasping the relationship between the cost of funds and borrowing
is crucial. Poonawalla Fincorp's stability amid economic changes
is a valuable example, showing the careful balance needed to
manage finances effectively.

11. Thanks!