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Informist, Tuesday, Nov. 5, 2024

 

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--Manappuram Fin Jul-Sept consol net profit INR 5.71 bln 
--Analysts saw Manappuram Fin Jul-Sept consol net profit INR 5.29 bln 
--Manappuram Fin Jul-Sept consol net profit INR 5.71 bln vs INR 5.58 bln 
--Manappuram Fin Jul-Sept consol revenue INR 26.33 bln vs INR 21.61 bln 
--Manappuram Fin to pay INR 1 per share interim dividend 
--Manappuram Fin Apr-Sept consol net profit INR 11.25 bln vs INR 10.54 bln 
--Manappuram Fin Apr-Sept consol revenue INR 51.21 bln vs INR 41.91 bln 

 

By Kabir Sharma

 

MUMBAI – Manappuram Finance Ltd. on Tuesday reported a net profit of INR 5.71 billion for the quarter ended September on the back of a 17.4% growth in its net interest income, exceeding brokerages' expectations that the financier's bottom line would come in at INR 5.59 billion. Compared to a year ago, the Jul-Sept net profit was higher by only 2.2%.

 

The non-banking financial company's consolidated assets under management also rose 17.4% on year to INR 457.16 billion--with the non-gold loan business now accounting for 46.7% of it--propelling a similar increase in the net interest income to INR 17.27 billion.

 

The gold assets under management of the company grew 17.1% on year to INR 243.65 billion as of Sept. 30, while microfinance loans were 8.7% higher at INR 109.70 billion. Gold loans and microfinance are key for Manappuram Finance and accounted for 77% of its assets under management as at the end of September. This segment could take a beating in the coming quarters on account of the Reserve Bank of India on Sept. 30 asking all lenders to review their gold loan practices after it found "several irregular practices" being followed by entities in the sector. Separately, the regulator on Oct. 17 had barred Asirvad Microfinance Ltd--a subsidiary of Manappuram Finance--from making new loans starting Oct. 22 due to concerns regarding its pricing of loans, which the central bank found to be "excessive", among other issues.

 

Asirvad Microfinance's assets under management were down 1.3% sequentially in Jul-Sept and are expected to fall further on account of the RBI ban. Asirvad saw a 33.2% on-year fall in its profit before tax to INR 1.02 billion in the quarter ended September. Asirvad's asset quality saw a sharp decline during the quarter. Its gross non-performing asset ratio rose to 4.3% from 3.0% a quarter ago. The net non-performing asset ratio rose by 60 basis points to 2.0% in Jul-Sept.

 

The asset quality of Manappuram Finance as a whole also worsened in the September quarter. The gross non-performing asset ratio and the net non-performing asset ratio rose 40 bps on quarter each to 2.4% and 2.1%, respectively.  

 

The assets under management for the housing finance segment of the company were valued at INR 16.92 billion, compared to INR 13.05 billion in the year-ago period. Gross bad loans in this segment also rose 40 bps on quarter to 3.3%. The bad loans in the vehicular and equipment finance business also rose by 60 bps to 4.2% in Jul-Sept.   

 

As predicted by brokerages, the cost of funds for the non-bank lender rose. Consolidated cost of funds grew to 9.2% in Jul-Sept, compared to 8.9% in the year-ago period. The share of term loans fell to 48% in the funding mix from 54% in the quarter ago period, while external commercial borrowings rose to 19% from 10% in Apr-Jun. 

 

The company on Tuesday declared a quarterly dividend of INR 1 per share. Shares of the company ended Tuesday's session at INR 158.98, up 3.98%.  End

 

Edited by Tanima Banerjee

 

 

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