Manappuram Finance consolidated Q4 net up 17.6% to Rs 468 cr, NII up 7.2%

Mulls listing of MFI subsidiary

Gold loan company Manappuram Finance Ltd's consolidated net profit rose by 17.6 per cent to Rs 468.35 crore in the fourth quarter ended March 2021 (Q4FY21). It had posted consolidated net profit of Rs 398.2 crore in Q4FY20.

The consolidated net for the full year ended March 2021 was up 16.53 per cent at Rs 1,724.95 crore, from Rs 1,480.30 crore.

Manappuram Finance declared an interim dividend of Rs 0.75 per equity share of face value Rs two.

Its stock closed flat at Rs 160.30 on BSE.

Net interest income in Q4FY21 rose 7.2 per cent to Rs 10,984 crore this March from Rs 10,245 crore a year ago. The cost of funds declined to 9.1 per cent from 19.9 per cent.

Manappuram Finance's managing director & chief executive, V P Nandakumar, said interest rates have bottomed out and are likely to harden.

The Company’s consolidated Assets under Management (AUM) grew 7.9 per cent to Rs 27,224.22 crore this March from Rs 25,225.2 crore last year. The growth was led by gold loans which grew by 12.44 per cent to reach Rs 19,077.05 crore in FY21. The gold business has 70 per cent share in the consolidated book.

In the microfinance business, run through subsidiary Asirvad Microfinance Ltd, the profit rose by 8.76 per cent to Rs 5,984.63 crore in March 2021 from Rs 5,502.64 crore in March 2020. Nandakumar said this business can cross Rs 10,000 crore mark in a few years and expects it to have 10-15 per cent share in consolidated AUM.

The microfinance business has got capital adequacy of over 20 per cent, much higher than regulatory requirement. There is also an option to raise capital via tier-II bonds, so the company may not need external capital to grow business. The parent, Manappuram, can also support the subsidiary if at all it needs capital. 

The AUM in the vehicle and equipment finance division fell by 21.7 per cent to Rs 1,052.56 crore in March 2021 due to the fallout of the pandemic-induced slowdown.

The company’s home finance subsidiary contributed Rs 666.27 crore to the total AUM in March 2021, against Rs 629.61 crore in the previous year. Overall, the non-gold businesses --vehicle finance and microfinance--made up 30 per cent to the total portfolio.

The capital adequacy ratio (standalone) was maintained at a high level of 28.88 percent. The net NPA position of the company stood at 1.53 percent, and gross NPA at 1.92 percent, as of March 31, 2021