- Net Profit: INR564 crore, up 35.7% YoY.
- Gold Loan AUM: INR21,500 crore, up 8.9% YoY and 3.6% sequentially.
- Standalone AUM: INR28,679 crore, up 17.4% YoY.
- Consolidated AUM: INR42,070 crore, up 18.7% YoY.
- ROA: 4.9%, up 60 bps YoY.
- Microfinance AUM: INR11,881 crore, up 18% YoY.
- Microfinance Profit: INR458 crore, up 105% YoY.
- Vehicle Finance AUM: INR4,111 crore, up 69% YoY.
- Home Loan AUM: INR1,510 crore, up 37.8% YoY.
- Non-Gold Business Share: 49% of total AUM.
- Consolidated Profit After Tax: INR563 crore, up 35.7% YoY.
- Consolidated Profit After Tax for the Year: INR2,197 crore, up 46.5% YoY.
- ROE: 20%.
- Leverage: 2.9 times.
- GNPA: 1.93%.
- Cash and Cash Equivalents: INR3,181 crore.
- Undrawn Bank Lines: INR6,000 crore.
- Borrowing Cost Increase: 16 bps in Q4 FY24.
- Standalone PAT: INR428 crore, up 2.6% adjusted for dividend.
- Standalone PAT for the Year: INR1,658 crore, up 30.9% YoY.
- Vehicle Finance GNPA: 2.9%.
- Home Loan Collection Efficiency: 98%.
- Home Loan GNPA: 2.4%.
- MSME Loans: INR2,908 crore with 100% collection efficiency.
- MSME GNPA: 1.7%.
- Lending to NBFCs: INR989 crore with an ROA of 5%.
- Interim Dividend: INR1 per share.
- CRAR: 30.6%.
- Consolidated Net Worth: INR11,548 crore.
- Book Value: INR136 crore.
Release Date: May 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Manappuram Finance Ltd (BOM:531213, Financial) reported a net profit of INR564 crore, marking a 35.7% year-on-year improvement.
- Gold loan AUM increased by 8.9% year-on-year to INR21,500 crore.
- The company's microfinance subsidiary, Asirvad, posted an AUM of INR11,881 crore, showing an 18% year-on-year growth and a profit increase of 105% over the previous financial year.
- Vehicle finance business recorded a 69% year-on-year increase in AUM, reaching INR4,111 crore.
- The company maintains a strong capital position with a CRAR of 30.6% and a consolidated net worth of INR11,548 crore.
Negative Points
- The borrowing cost increased by 16 basis points in Q4 FY24, impacting overall profitability.
- The company's standalone profit after tax was slightly down quarter-on-quarter.
- Microfinance business faced challenges in states like Punjab and Rajasthan, affecting collection efficiency and profitability.
- The GNPA for the MSME segment rose from 1.5% to 2.8%, indicating asset quality issues.
- Digital personal loans showed higher delinquency rates, leading to a tightening of underwriting processes and reduced disbursals.
Q & A Highlights
Q: Given the shift from cash disbursements to RTGS or NEFT, do you foresee any customer attrition due to banks having access to customer profiles?
A: We have been compliant with the INR20,000 cash disbursement limit since May 8, 2024. We do not anticipate any significant business impact as most customers have bank accounts. We have seen an increase in online gold loans, now at 63%, and do not expect customer poaching by banks due to high customer loyalty. (Vazhappully Nandakumar, CEO)
Q: What is the impact of higher gold prices on your growth expectations for the next two quarters?
A: While higher gold prices may lead to a slight increase in growth, customers typically borrow based on their repayment confidence, keeping the average loan life around 100 days. Thus, the impact of gold price fluctuations on loan amounts is minimal. (Vazhappully Nandakumar, CEO)
Q: Can you explain the trend in employee expenses, especially with strong growth in non-gold business?
A: Employee expenses have been rationalized in the gold loan segment due to increased online gold loan transactions. In the non-gold business, we are expanding our footprint, leading to an increase in headcount. (Vazhappully Nandakumar, CEO)
Q: What are the issues affecting the microfinance business in states like Punjab and Rajasthan?
A: We have faced collection challenges in these states but have reinforced our collection machinery. We expect improvements in collections and profitability going forward. (Vazhappully Nandakumar, CEO)
Q: What is the capital allocation strategy for Manappuram Finance, especially with the upcoming IPO of Asirvad Microfinance?
A: Our strategy focuses on secured lending, with around 10% allocated to unsecured lending like microfinance. The IPO will support Asirvad's growth plans. At the parent level, we aim to maintain a 20% ROE and are expanding into non-gold secured lending. (Vazhappully Nandakumar, CEO)
Q: What is the guidance for gold loan AUM growth for the next year?
A: We expect robust growth in the gold loan segment, potentially better than last year, and aim to maintain an ROE of 20%. (Vazhappully Nandakumar, CEO)
Q: How has the restriction on cash disbursements impacted daily disbursement run rates?
A: We have seen growth improve post-implementation of the new regulations, likely due to our robust online gold loan system. We do not expect long-term negative impacts. (Vazhappully Nandakumar, CEO)
Q: What is the current status of the auction surplus and its impact on profitability?
A: The auction surplus has been reduced from INR48 crore to around INR14 crore. We have informed the RBI and expect to continue reducing it by around INR2 crore each quarter. (Vazhappully Nandakumar, CEO)
Q: What are the credit costs for the microfinance business and overall consolidated basis?
A: Credit costs are currently elevated at 1.8% due to microfinance collections. We expect this to improve as collection efficiency increases. (Bindhu L., CFO)
Q: What is the collection efficiency in the vehicle finance segment?
A: The GNPA is around 2.9%, and collection efficiency is 100%. We have strengthened our CRM and expect to maintain asset quality below 3%. (Vazhappully Nandakumar, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
