https://moiglobal.com/making-gold-productive/
By Rohit Chauhan
combination of topline growth from new initiatives, normalization of macro conditions,finally reduction in security expenses means that the company should be able to double its profits in the next three years. A company growing at 20% + rate with an ROE of 20%, cannot continue to sell at 13 times earnings when comparable firms sell at 20 times or highe
Other ideas
https://moiglobal.com/asia18-highlights/?utm_source=dlvr.it&utm_medium=twitter
You indirectly saying that if the company continues to command the current PE - with in three years the share price would double - which is not a bad investment proposition.
http://bfsi.eletsonline.com/mfis-reinventing-financial-inclusion-in-india/
S V Raja Vaidyanathan, Managing Director, Asirvad Microfinance:
With the support of Manappuram, Asirvad will certainly emerge as one of the top three in the very near future.
We expect the industry to register a modest growth of 30 per cent.
Despite the growth, the industry caters to less than 25 per cent of the demand and this indicates the potential for future growth
Capital was also a constraint for growth for us. But since Manappuram Finance acquired the company in 2015, the growth was accelerated and today we are the sixth largest NBFC – MFI in the country Rs 2300 crore Assets Under Management (AUM). We have a PAN India presence. We are spread across 21 states with 1.5 million members and a network of around 832 branche
SKS says they can grow at 80%! Market can absorb. Though, in my opinion, investing in MFIs is like playing with fire. Imagine, they call 30% growth as ‘modest’.
Lending business is not about disbursement, it’s all about collection! When tragedy hits, everyone will seek cover, when there will be none. So be cautious with Mana’s MFI vertical. Gold loan business is good as it is lending like MFI (at similar rates) but with collateral! No risk!
Disclaimer: Invested. Added more in last 3 months.
If there is no risk, why not many competitors exist? Why do they diversify into MFI rather than only do Gold loan business? Think.
Mate, read carefully what i have written before writing. What is risky and what is not, what is easy hunting ground and what is not, all there in my last msg.
Reg diversification, they need to grow, hence diversifying. Gold loan cannot grow as fast as it has been growing in the past. Right now MFI loan book is close to 18% if my memory serves me right. As this share increases, loan book would be lot more risky.
Reg competitors, gold loan is not an easy business to pursue despite availability of cheaper funds. Many tried but haven’t managed to grow it substantially. This has been discussed very thoroughly on this thread.
Looks like microfinance recovered completely. good Q4 results posted with 10cr PAT.
International gold prices have broken the key resistance on rising bond yields and USD. However, India gold is not so weak due to falling Fx too.
For the microfinance business for full year tax paid is negative 17.5 crores . Can somebody please explain to me how is tax amount negative ?
It is not Tax paid. It is just accounting tax expense which is made up of current and deferred tax. Here the negative tax expense will relate to deferred tax asset for tax losses which can be carried forward and utilized when the company is in profit.
Q4 2018 Result:http://www.manappuram.com/public/uploads/editor-images/files/Q4%20FY%202017-18%20Result.pdf
Presentation: http://www.manappuram.com/public/uploads/editor-images/files/Manappuram%20-%20Q4%20FY18%20Results%20Update%20Presentation.pdf
AJ
Mixed bag, i would say.
Asirvad has turned around while gold loan business is stagnant (in fact de-growing in terms of profitability qtr on qtr from last 4 qtrs). Though, the good part is that all 4 qtrs this year have had sequential growth. We cannot compare yoy here for obvious reasons. So overall, decent numbers.
NNPA has improved from .4 to .3 while GNPA is stagnant at .7
ROA, ROE, CAR, Cost of Borrowing has deteriorated slightly…nothing big though.
Security costs are yet to come down as promised.
Housing Fin GNPA is 4.8%. need to be monitored.
Vehicle finance division is growing fine. NPAs are low here compared to other players.
They need to do something to bring back Gold loan financing on track. Disbursements have improved in this qtr so hopefully, next year is going to be much better on lower base.
Muthooth Finance has GNPA of about 6% while manapppuram is 2.3%. Whats the reason?
Manappuram gold tonnage is almost highest level. This qtr they took one time provision of 12cr in gold. Their mfin provision is gradually decreasing, trend was 40cr>30cr>15cr till this qtr. And this trend will continue, will not be surprised if they post 200cr pat next qtr
What is tonnage? And what is relation of levels with npa?
2.3 and 6% are gnpa so provisions should not matter in comparing these right?
NIM overall seems to have improved. Or maybe I’m calculating it incorrectly:
NIM = (Net Interest Income - Interest Expenses)/ Interest Earning Assets
FY17 = 7.67%
FY18 = 8.66%
I’ve taken Interest Expense as Finance Costs, and Interest earning assets as the AUM.
Does Manappuram not declare NIMs? (Like more Housing Finance Companies do)
Regards,
Manappuram gold loans are of 3 month tenure where as Muthoot’s loan tenure is much higher. The probability of a loan becoming non performing is much lesser when you sell lower tenure products. Now you know why the NPA levels of Manappuram is significantly lower than that of Muthoot.
AJ
1 reason as i heard in d concall muthooth does not auction d gold quickly and gives d customer additional time to arrange and repay d loan while manappuram auctions within 6 months