Manappuram Finance Ltd Q2 FY2025 Concall Summary

Source transcript PDF: https://assets.stockscans.in/docs/noutwqgw157iura76ae2tldv.pdf

Key Takeaways


Asirvad Microfinance: The Ban and the Fallout

V P Nandakumar: “Our logic is simple. So some customers are bad, in particular group or a geography, why should other customers take the load of that bad customer.”

Gold Loan Business: Regulation and Growth

V P Nandakumar: “In some of the areas, there are some practical challenges which we will bring to the attention of the authorities of the RBI. And whatever they want after the discussion, they insist upon, the entire sector will comply with. And that will make the sector only healthy. It’s not going to destroy the sector.”

Microfinance Portfolio: Stress and the Recovery Bet


Consolidated Financials and Asset Quality


People, Operations and Compliance


Guidance & Commitments

CommitmentSpecificsTimeline
Gold loan growth10%–15% annually (also stated as 12%–15%)Ongoing annual guidance
Consolidated credit cost2%Maintained; no timeline for return to this level given current MFI stress
Asirvad ban resolutionCompliance plan submitted; hopeful of lifting at the earliestMinimum 3–4 months per management’s working expectation
MFI repayment recoveryGreen shoots in Q3, meaningful improvement from Q4Q3 FY25 (green shoots), Q4 FY25 (recovery)
Gold loan regulatory complianceFull implementation of RBI circular requirementsBy December 2024
Asirvad Tier 1 capitalMaintain at 15%–18%Ongoing through stress period
Overall portfolio growth15%–18% with more focus on secured loans including goldOngoing annual guidance
Asirvad ROA normalisationReturn to pre-liberalisation credit cost and opex levelsConditional on ban lift and collection recovery

Key Metrics

MetricQ2 FY25
Consolidated net profit₹572.1 cr, +2.8% QoQ and +2% YoY
Consolidated AUM₹45,716 cr, +17.4% YoY and +1.7% QoQ
Consolidated ROE18.6%
Consolidated ROA4.4%
Consolidated impairment charge₹260 cr, vs ₹228 cr in Q1 FY25
Consolidated credit cost guidance2%, unchanged
Standalone gold loan AUM₹24,365 cr (53% of consol AUM), +17.1% YoY and +3% QoQ
Standalone gold loan profit₹475 cr, +13.1% YoY and +7.8% QoQ
Standalone GNPA2.42%, vs 1.96% in Q1 FY25
Gold loan growth guidance10% to 15% annually
Asirvad Microfinance AUM₹12,149 cr, +11% YoY and -1.3% QoQ; includes gold loan AUM of ₹1,117 cr
Asirvad PAT₹75 cr, -36% YoY and -25% QoQ
Asirvad Net NPA1.99%
Asirvad Stage 3 assets4.5% of book as of 30 Sep
Asirvad Stage 2 assets2.6%, vs 1.7% in Q1 FY25
Asirvad total ECL provision₹390 cr
Asirvad credit cost (Q2 annualised)~7% (per an analyst's math)
Asirvad CRAR21.48%
Asirvad Tier 1 capital ratio17%
Vehicle finance AUM₹4,848 cr, +54% YoY and +6.8% QoQ
Vehicle finance GNPA4.2%
Vehicle finance collection efficiency95%
Home loan AUM₹1,692 cr, +29.6% YoY and +6.6% QoQ
Home loan GNPA3.28%
Home loan collection efficiency96%
Secured MSME AUM₹2,963 cr; disbursement of ₹373 cr during the quarter
Secured MSME GNPA3.8%
On-lending AUM₹816 cr; disbursement of ₹78 cr during the quarter
Consolidated CRAR29.22%
Consolidated net worth₹12,529 cr; book value per share ₹148
Cash and cash equivalents₹4,939 cr; undrawn bank lines ₹3,432 cr
CP exposure2.2% of borrowings
Standalone borrowing cost increase8 bps QoQ
Gold loan online book share74% of total gold loan book
Gold loan new customers added4.03 lakh; total live customers 26.55 lakh
Gold loan average LTV58%, vs 62% in Q1 FY25
Gold loan auction value₹360 cr; gold price realised ₹7,080 per gram
Gold loan accrued interest₹1,095 cr
Gold loan book ≤₹1 lakh42.3% of gold loan book
Interim dividend₹1 per share
Overall AUM growth target15% to 18%