Manappuram Finance, in its fourth-quarter earnings report, posted a 44 percent fall in net profit at Rs 261 crore as against a net profit of Rs 468 crore reported in the same quarter a year ago.
“Our PAT (Profit After Tax) has been affected temporarily due to shifting of high yield to lower-yielding gold loans. We have reduced Opex (operating expenses) during this quarter, and we intend to maintain it at this level.
“We are focusing more on collection efficiency and quality growth in MFI books and building up a gold loan portfolio,” Manappuram Finance said in an investor presentation.
The company’s net interest income declined by 10.2 percent in March ended quarter to Rs 986.50 crore compared with Rs 1,098.40 crore in the fourth quarter of fiscal 2021. Sequentially, there was a 3.5 percent rise from the previous quarter’s Rs 953.40 crore.
The income from operations declined 8.7 percent to Rs 1,481.40 crore during the quarter under review from Rs 1,484.5 crore, a year ago.
Manappuram Finance claimed that over Rs 2 lakh ticket size currently accounts for 33 percent of its Asset Under Management (AUM), which stood at Rs 30,300 crore as of March 2022.
The gold loan financier’s AUM increased by 11.2 percent year over year but declined by 0.5 percent from the previous quarter.
“Our LTV is at 62 percent as of March 31, 2022. We expect that as liquidity gets tighter and funding dries up, especially for some of our loss-making competitors, we may see some revival of yields in the gold loan business,” the company added.
For the full year 2021-22, the net profit dropped 23 percent to Rs 1,320.20 crore from Rs 1,708.60 crore a year ago.
Income trimmed 4.3 percent during the year, at Rs 6,061 crore from Rs 6,331 crore in fiscal 2021.
“Over the last fiscal year, we have restored the growth momentum in our microfinance, vehicle finance, and home loans businesses despite the disruptions from the third wave.
“At the same time, our core business of gold loans faced certain peculiar challenges arising from the intense price competition among the NBFCs that prevailed for much of the year, thereby impacting our margins. However, we see this as a temporary phase, as unhealthy competition will benefit no one,” V P Nandakumar, MD & CEO of Manappuram Finance, said.
Following the declaration of the earnings report, shares of Manappuram Finance on Thursday fell almost 10% to Rs 94.30 apiece on NSE.