Manappuram Finance shares fall on poor profit booking in March quarter

Manappuram Finance, in its fourth quarter earnings report, saw a 44% drop in net profit to Rs 261 crore from a net profit of Rs 468 crore reported in the same quarter a year ago.

“Our PAT (Profit After Tax) was temporarily affected due to the shift from high yielding loans to low yielding gold loans. We reduced Opex (operating expenses) during this quarter, and we have l intention to maintain them at this level.

“We are focusing more on collecting efficiency and growing the quality of MFI books and building a portfolio of gold loans,” Manappuram Finance said in an investor presentation.

The company’s net interest income fell 10.2% in the quarter ended March to Rs 986.50 crore from Rs 1,098.40 crore in the fourth quarter of the fiscal year. 2021. Sequentially, there was an increase of 3.5% from the previous quarter’s Rs 953.40 crore.

Operating income decreased by 8.7% to Rs 1,481.40 crore in the quarter under review from Rs 1,484.5 crore a year ago.

Manappuram Finance claimed that note sizes over Rs 2 lakh currently account for 33% of its assets under management (AUM), which stood at Rs 30,300 crore in March 2022.

The gold lending financier’s assets under management rose 11.2% year-over-year, but fell 0.5% from the prior quarter.

“Our LTV is 62% as of March 31, 2022. We anticipate that as liquidity tightens and funding dries up, particularly for some of our loss-making competitors, we could see a recovery in returns in the credit sector. gold loans,” the company added.

For the full year 2021-22, net profit fell by 23% to Rs 1,320.20 crore from Rs 1,708.60 crore a year ago.

Revenue fell by 4.3% during the year to Rs 6,061 crore from Rs 6,331 crore in FY2021.

“Over the past year, we have restored growth momentum to our microfinance, auto finance and mortgage businesses despite third wave disruptions.

“At the same time, our core gold lending business faced some unique challenges arising from the intense price competition among NBFCs that prevailed for much of the year, which had a impact on our margins. However, we view this as a temporary phase as unhealthy competition will not benefit anyone,” said VP Nandakumar, MD and CEO of Manappuram Finance.

Following the earnings report statement, Manappuram Finance shares fell almost 10% on Thursday to Rs 94.30 each on NSE.