Magma Fincorp hits record high post Q1 results

The stock hit a record high of Rs 185, surged 9% on BSE in intra-day trade.

Magma Fincorp hit a record high of Rs 185, surging 9% on BSE in intra-day trade after the asset management company said that its net interest margin (NIM) improved 143 bps year-on-year (yoy) to an all-time high of 8.3% in June quarter (Q1FY18) due to improvement in cost of funds and decline in non-income generating non-performing assets or NPAs.

The company posted 5% year-on-year decline in net profit of Rs 45.1 crore compared to Rs 47.6 crore reported in the corresponding quarter of last fiscal year due to the additional provisions of Rs 10 crore made in this quarter for moving towards 90dpd NPA provisioning norms by March 2018.

Gross non-performing assets (NPA) increased 30 basis points y-o-y to 7% and net NPA rose 10 basis points to 5.7% in Q1FY18. Gross NPA and Net NPA stood at 6.7% and 5.6%, respectively, as on Q4FY17.

“Despite first quarter being seasonally weak for the industry, the NNPA of the company has marginally reduced as against the normal trend of increase in first quarter of past years. The company is confident that the asset quality will continue to improve during the year resulting in lower credit losses and interest income reversal,” Magma Fincorp said in a statement.

With the likely improving macro fundamentals of the Indian rural economy due to normal monsoons and increased expenditure by government in rural India, the company expects to end the year with positive AUM growth and with a significantly better asset quality, it added.

In past three months, the stock has outperformed the market by gaining 50% as compared to 8% rise in the S&P BSE Sensex.

At 11:24 am; the stock was up 4% to Rs 176, against 0.47% decline in benchmark index. A combined 656,508 shares changed hands on the counter on BSE and NSE so far.