 "Manappuram Finance")
India's Manappuram Finance Ltd on Monday reported a bigger-than-expected rise in second-quarter profit, aided by strong demand for loans.
The gold financing company's consolidated net profit rose nearly 37% to 5.58 billion rupees ($67.01 million)for the quarter ended Sept. 30, beating analyst expectations of 4.98 billion rupees, according to LSEG data.
Gold prices hit a record high earlier this year and though it saw some subsequent corrections, prices were up more than 20% year-on-year for the quarter.
Rise in gold prices benefits gold financiers as more customers pledge the yellow metal as collateral for loans, aiding growth.
Manappuram's interest income rose over 27% to 20.44 billion rupees.
The Kerala-based company's revenue from its gold loan business, which accounts for about three-fourths of its topline, rose 18.5% to 15.37 billion rupees, while its micro-finance arm posted a 53% revenue growth.
The company's finance cost, however, rose more than 30% due to a high interest rate environment, pushing up total expenses by 23%.
India's central bank has hiked rates by 250 basis points since May 2022 in a bid to cool surging prices.
Last week, larger rival Muthoot Finance posted a near-15% rise in quarterly profit but missed estimates on higher finance costs.
The profit beat comes after an Indian court, in August, quashed a money laundering case against the company's CEO, V P Nandakumar, that was brought by the country's financial crime-fighting agency in which Nandakumar's personal assets, including shares in Manappuram Finance, were frozen.
Manappuram's shares closed 4.7% higher after the results.
Manappuram's shares closed 4.7% higher after the results.
