Magma Fincorp drops after poor Q3 earnings

Magma Fincorp lost 2.32% to Rs 65.20 at 15:12 IST on BSE after consolidated net profit declined 3.3% to Rs 35.24 crore on 20.2% growth in total income to Rs 535.57 crore in Q3 December 2013 over Q3 December 2012.

The Q3 result was announced after market hours on Friday, 31 January 2014.

Meanwhile, the S&P BSE Sensex was down 302.53 points or 1.47% at 20,211.32.

On BSE, so far 843 shares were traded in the counter as against average daily volume of 53,924 shares in the past one quarter.

The stock hit a high of Rs 67.50 and a low of Rs 65.05 so far during the day. The stock had hit a 52-week high of Rs 103 on 21 May 2013. The stock had hit a 52-week low of Rs 62 on 26 September 2013.

The stock had outperformed the market over the past one month till 31 January 2014, sliding 2.34% compared with the Sensex's 3.1% fall. The scrip had, however, underperformed the market in past one quarter, declining 11.94% as against Sensex's 3.07% fall.

The small-cap company has equity capital of Rs 38.02 crore. Face value per share is Rs 2.

Magma Fincorp's loan book increased a modest 20% YoY to Rs 17224 crore and its Capital Adequacy Ratio (CAR) stood at 15.3% as on 31 December 2013.

Magma Fincorp said that the impact of higher non-performing assets (NPAs) provisioning was partly cushioned by the increase in net interest spread (NIS) and growth in earning loan assets and partly by improvement in operating efficiency.

Commenting on the company's financial performance, Mr Sanjay Chamria, Vice Chairman and MD, Magma Fincorp said, "In the back drop of a difficult environment and inconsistent cash flows in our customer's hands, we remain focused on maintaining our profitability and portfolio quality. Being consistent with this focus, while we have improved our net spreads and operating efficiency, we are seeing a turnaround in collection efficiency. We will continue to work on further improving the portfolio quality".

Mr Chamria further added, "On the asset quality front, in line with our conservative approach to NPA recognition, we have made a significant amount of provisioning for NPAs and with a better performance expected during the ensuing quarters we will rollback these provisions ensuring superior profitability for the entity".

Magma Fincorp is one of the largest non-banking finance companies (NBFC) in India engaged in providing commercial vehicle finance, construction equipment finance, car and utility vehicle finance, Suvidha loans (refinance), strategic construction equipment finance, tractor finance, SME loans and loans against gold to individual and corporate customers.

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