Q1 2027 Manappuram Finance Ltd Earnings Call Transcript
Key Points
- Consolidated AUM grew 9% QoQ and 57% YoY to INR 69,635 crore, driven by strong gold loan growth.
- Gold loan AUM surged 12% QoQ and 98% YoY to INR 57,006 crore, with improved yields of ~18%.
- Consolidated PAT before OCI increased 44.5% QoQ and 54% YoY to INR 585 crore, reflecting strong operational performance.
- Asset quality improved with standalone GNPA down to 1.56% from 1.8% QoQ, and credit cost at 1%.
- Microfinance business turned profitable with PAT of INR 21 crore vs. a loss of INR 269 crore YoY, and GNPA improved to 1.4%.
- Company plans to open 500 new branches in FY27, supported by removal of prior RBI approval requirement, enhancing growth potential.
- Strong capital position with CRAR of 21.29% and net worth of INR 16,552 crore, providing financial flexibility.
- New income-generating loan products under revised regulations are gaining traction, with interest rates of 14-16% and LTV up to 85%.
- Management targets ROA of 3.8-4% and ROE of 16-18% over the next three years, indicating confidence in profitability.
- Declared interim dividend of INR 1 per share, reflecting shareholder returns.
- Vehicle finance AUM declined 14.3% QoQ and 43% YoY, with GNPA elevated at 13.3% (up from 10.4% QoQ), indicating stress in this segment.
- Gold loan LTV increased to 65.6% from 57.3% QoQ due to a drop in gold prices, raising potential risk if prices decline further.
- Borrowing costs rose by ~10 bps in Q1 FY27, and management expects further increases due to elevated market rates.
- Microfinance business remains under pressure with elevated provisions in Q1 FY27, though normalized from one-off Q4 releases.
- Home loan book remained flat QoQ and declined 3% YoY, indicating lack of growth in this segment.
- MSME and Allied lending saw a GNPA of 5.9%, though improved from 7.1% QoQ, still indicating credit risk.
- Management has temporarily halted growth in vehicle finance and is focusing on collections, limiting diversification.
- Gold loan growth guidance of ~30% for FY27 may be challenging if gold prices remain muted, as growth is partly price-driven.
- New income-generating loan products are limited to 2% of portfolio, indicating cautious approach and slow adoption.
- Attrition at branch level remains at 2.8% per month, which could impact operational efficiency.
Ladies and gentlemen, good day and welcome to the Manappuram Finance Q1 FY27 earnings conference call. (Operator Instructions) Please note this conference is being recorded.
I now hand the conference over to Mr. Abhijit Tibrewal from Motilal Oswal Financial Services Limited. Thank you, and over to you, sir.
Thank you, Steve. Good evening, everyone. I'm Abhijit Tibrewal from Motilal Oswal, and it is our pleasure to welcome you all to this earnings call. Thank you very much for joining us for Manappuram Finance earnings call to discuss the Q1 FY27 earnings.
To discuss the company's earnings, I am pleased to welcome Mr. V.P. Nandakumar, Chairman and MD; Dr. Sumitha Nandan, Executive Director; Mr. Buvanesh Tharashankar, Group CFO and CFO; Mr. Manoj Prasannan, Co-CEO, Asirvad Microfinance; Dr. Roy Varghese, Co-CEO, Asirvad Microfinance; Mr. Mandeep Singh, CFO, Asirvad Microfinance; Mr. Kamal Parmar, Head, Vehicle & Equipment Finance; Mr. Rakesh Sharma, Co-CEO, Manappuram Home Finance; Mr
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