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Manappuram Finance Ltd
Highlights Of Q3 FY19 and Nine Month FY19 Results
Financials
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Consolidated
- AUM grew by 21 % to 17,783 Cr compare to last year same quarter and 3.4 % QOQ.
- Income from operations was Rs 1081.2 Cr an increase of 6.6 % QOQ and 24 % YOY.
- Net Profit stood at 244 Cr compare to 221.4 Cr preceding quarter an increase of 10.3 % QOQ and 42 % YOY.
- ROE stood at 23.02 % annualized for the quarter ended 2018
- Gold holdings were at 6.3 ton the holding is decrease by 1.58 % QOQ and 6.4 % YOY. Total number of gold loan customer stood at 23.8 lakh . Gold loan book is at 25223 Cr which was up by 10.6 % YOY.
- Auction during the quarter were Rs 187 Cr
- Weightage average LTV stands at Rs 1890 of 65 % of the current gold price.
- Gold loan disbursement during the quarter were at 21028 Cr compare to Rs 18,337 Cr in Q2 FY19.
- Online Gold loan book is stated which is on account of 36 % of total gold loans.
- Consolidated net worth stood at Rs 4341 Cr as on 31st Dec 2018.
- Book value per share stood at 51.41 of diversify business
- Capital adequacy at the end of Dec-31st was 26.36 %.
- Consolidated borrowing stood at Rs 14267 Cr as on Dec-18.
- Proportion of CP reduced from 24 % to 21.6 % YOY
Segmental Performance
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Ashirvad Microfinance
- AUM stood at 3195 Cr an increase of 17.1 % QOQ and 51.3 % YOY.
- Registered profit of 33 Cr compare to 29.4 Cr in Q2 FY19.
- Provision of 5.3 Cr for doubtful loss.
- Company provided 19.4 Cr access compare to RBI prudential norms.
- 100 % of disbursement were made in Non-Cash manner.
- Company has 16.66 lakh customers , 928 branches and 4872 employees present in 22 states and 7th largest MFI in the country among the lowest cost MFI in India within the AUM cost of 6.4 %.
- Company had capital adequacy ratio of 18.3 %
- Plan to raise equity in the near future
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Commercial Vehicle Business
- AUM grew by 95 % to 975.5 Cr compare to 500 Cr last year same quarter
- Double asset quality of 2.4 % DNDA as on 31st Dec 2018.
- It has 157 branches compare to 90 branches a year ago.
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Manappuran Home finance Ltd
- Reported AUM growth of nearly 40 % to 478 Cr
- It operates in 35 branches and new business contributed 29.6 % of Consolidated AUM.
- Average cost of borrowing during the quarter increased by 48 basis points to 9.37 % which does not impact the margin due to optimization of yield.
- Benefited from significant operating leverage of overall OPEX only grew by 9.8 % compare to 21 % growth in AUM.
- Significant saving in security cost compare to few quarters ago. It reduce to Rs 44 Cr from Q3 FY18 to Rs 22 Cr in current quarter.
- Provision and write off for the standalone entity were Rs 1.4 Cr
- Gross NPA was 0.58 % at the end of quarter. Loss assets to AUM was only 0.4 % of AUM.
Key Highlights
- All subsidiary business contributed 30 % of consolidated AUM
- Average cost of borrowing increase by nearly 50 bps to 9.7 % but in the quarter company was able to pass on the increase cost.
- Despite the tight liquidity company face no difficulty in existing credit lines and new lines of credit.
- In start of the quarter company secure funding of NABARD and in October 2018 company launched public issue of secure NCD. That issue was fully subscribe and company raise about 1250 Cr.
Outlook
- Non gold portfolio would be 40 % in next 1-2 years
- Borrowing cost will be moderated at current level in next six month because of liquidity situation emerging scenario
- Company got license for opening 150 branches in next year
- Target is to double the AUM in next financial year.
- Company expect cost to income ratio to 6 % from 6.4 % current rate
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The board approved additional infusion of Rs 120 cr into the Microfinance subsidiary.
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Interview with md Nandakumar
Expecting 20% consolidated growth
Stock trading at around 11 PE
If we give modest Pe of 15 -20 then rerating is possible
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Intimation of Acquisition under Regulation 30 of SEBI (LODR) Regulations 2015
Please be informed that the Board of Directors at their meeting dated 20.03.2019 accorded their approval for acquiring 100% equity shares of Manappuram Comptech & Consultants Ltd and to make it a wholly owned subsidiary company of the Company.
Material Details regarding the Equity/Proposed Acquisition as per SEBI Circular
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Nandkumar:
Microfinance business Ashirwad grown at 40-45% last year
Expecting to grow at same rate this year
It needs capital to continue its momentum
We have invested 264 cr which brings our stake to 94%
Banker is appointed to raise capital 100 million dollars from private equity by end of second quarter
Ashirwad Expecting to grow to 10th Crore in 3 years
Currently 25% of portfolio in Tamil Nadu
7 Lac customer base
We want to get in sme loans (which will be co laterally backed by lender properties )from early second quarter
By 2020 gold loan will be 60% as non gold loan portfolio growing at decent rate
Over next 3-4 years gold loan portfolio will come to 50%
This year expecting 10-12% growth in gold loan
Recents cuts 25+25 will bring down our cost to 80 bips
No slowdown in lending by banks to us
From NABARD we got around 700 Crore
We expect international finance Corporation to lend us 500 Crore
7 Likes
In the past six months, the market price of manappuram has surged 73 per cent on the back of foreign portfolio investors (FPIs) buying.
Manappuram and muthoot least affected by liquidity crisis
Steady set of numbers from Manappuram yet again.
See the presentation for the quarter below:
Result presentation
Q4 Result
Quick updates from the Concall:
Ashirvad valuation - Recently Manappuram infused about 264 Crore as additional equity into Ashirvad MF valuing the business at 2.2 times the book value. With the closing book value of Ashirvad being 782 Crore the value of the company roughly translate to Rs. 1700 Crore.
Branch expansion - Company is planning to open about 150 branches during the year 2019-20.
Insurance business foray - Currently Company is collecting third party insurance premium of about 150 Crore from its gold loan customers. Company is planning to start an credit life insurance company to bring this business inhouse. Total investment expected in this venture is about 200 Crore.
Acquisition of Manappuram asset finance company - The idea is to avoid conflict of interest considering the business is run by the same promoter group. The current loan book is less than 250 Crore and the book value is about 60 Crore. Mr. Nandakumar did not disclose the valuation assigned for this business.
Disclosure: Invested
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Great results
Q4 FY19 RESULTS
+23.3% YoY and +9.3 % QoQ consolidated AUM growth
5.2% consolidated ROA, 23% consolidated ROE
+42.8% YoY and +4.7% QoQ consolidated Net Income growth
Standalone GNPA has declined to 0.5% in Q4 FY19 (vs. 0.6% in Q3 FY19 and 0.7% in Q4 FY18
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Link to management interview , held today
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