Manappuram Finance

Key takeaways:

Financial Performance:

The net profit increased by 46% year-on-year, reaching 575 crores.

Gold Loan saw an 11.5% year-on-year improvement, totaling 20,758 crores.

Standalone AUM for NGT grew by 23% to 27,407 crores.

Consolidated AUM reached 40,385 crores, a 27% increase over the previous year’s quarter.

The recorded ROA for the quarter was approximately 5.2%, significantly surpassing the industry average.

Ashirwad, the microfinance subsidiary, achieved an AUM of 11,563 crores, representing a 34% year-on-year growth and a Q3 profit of 127 crores, an 80% increase year-on-year.

The vehicle finance business experienced a 70% year-on-year increase, reaching an AUM of 3,597 crores.

Home loans showed a 41% increase over the previous quarter in FY23, with an AUM of 1,415 crores.

profit of 28 crores was reported from the fee-based business.

Current Operational Performance:

Standalone GNPA increased to 1.99% from 1.56% in the previous quarter.

Cash and cash equivalents on a consolidated basis totaled Rs. 3,076 crores, with an undrawn bank line of Rs. 7,138 crores.

Collection efficiency for the quarter was 98%, with GNPA at 2.6% for vehicle finance.

For home loans, collection efficiency was at 96%, with GNPA at 2.67%.

Collection efficiency was at 102%, with GNPA at 1.5% for MSME and allied businesses.

On-lending AUM amounted to Rs. 1,022 crores, with a 5% ROA for the quarter.

The consolidated net worth was Rs. 11,063 crores, with a book value of Rs. 130.70.

Future Outlook:

Anticipates a similar increase in the cost of borrowing in Q4 due to the circular that raised the risk rate on consumer credit exposure of NBFC lending.

Confident in achieving top-line and bottom-line growth while maintaining adequate liquidity.

Foresees a reduction in the surplus in auction, allowing for branch expansion.

Concerns:

Elevated credit costs in the microfinance business due to delays in collections in certain states.

Increase in the cost of borrowing due to the circular that raised risk rate on consumer credit exposure of NBFC lending.

Other Points:

The company has applied for 300 branches and is hopeful of getting permission for expansion.