AUM – 15,765 cr ; 15.4 % yoy
Gold loan disbursements – 62, 155 cr ; 18.5 % yoy
NII – 23957 cr; 8 % yoy
Total customers – 3.8 million ; 12% yoy
• Digitalization important part of our strategy
• New businesses 1/4th of our AUM , will go up in future
• 2/3rd of Indias GDP is in gold in households , right now only 10 % monetized , we hope to encash this
• Gold – 64 ton assets
• Borrowing cost – 8.7 %
• 4199 network branches , 24886 team of employees
Gold loan Division
• Gold loan AUM Rs.11,700 cr ( 5.5% growth)
• NP – 700 cr
•
Asirvad Microfinance
• MFI AUM 2437 cr vs 1796 cr ( 35 % yoy)
• Gross NPA 2.33 % NPA vs 4.47 % last year( seems like bad effects of demonetization are going off)
• Total branches added 69 ( 832 total)
• 2nd half of the year was much stronger , provisions for the year at 17.2 cr declined 57.2 % yoy
• This segment can be a major growth driver
Housing finance
• AUM at 375 cr ( 20.7 %)
• Plan to touch this AUM to 1000 cr , in next 2- 3 years .
• Opex brought down to 8.44 % from 10.3 % last year
• Gross NPA – 4.8 %
• Western region contributes the largest share of the loan portfolio.
• 419 staff, parent company( Manappuram) can put in equity when required
• Average ticket size of a Home Loan is about 11.50 lakh and for the LAP segment, it stands at about 8.00 lakh.
Vehicle finance
• AUM doubled to 625 cr
• Added 26 new branches taking total to 76
• Leveraging gold loan channel for this
• Gross NPA – 2.7 %
• Planning to add 26 new branches this year
• 70 % preowned vehicles
•
Gross NPA at 0.5 % vs 2% last year
Net NPA at 0.3% vs 1.7 % last year
Return on assets at 4 % vs 5.4 % last year
Employees at 23886 vs 18993 last year ( 26 % increase)
Online gold loan account for 32 % of the book as against 12 % last year.
Planning to venture into new businesses like corporate finance, personal loans, MSMEs , project and industrial finance
27.28 cr spent on branding and advertising
MD&A
NBFCs gaining an upper hand to banks as banking secotr
Bond yields and loan rates are on the climb ,will adversely affect margins
Limited opportunities to grow in gold loans, gold loan NBFCs are focusing on other areas
Obtaining gold loans is relatively easier to other loans , hence its rising popularity
Untapped markets of north and west india hold opportunity for gold loan penetrations
Gold loans have flexible terms , no need to pay EMI , can pay interest at end of tenure
Organized gold loan market to touch 3101 bn by 2020, growing 12-13 % CAGR
In August 2017, CARE Ratings has upgraded the long-term credit rating of Manappuram Finance Ltd (MAFIL) to CARE AA (double A) stable from CARE AA- (double A minus) stable
The Company also invested in ramping up safety of the lockers by installing IOT-based keyless e-lockers which offer multiple benefits including monitoring of the lockers by the customer from a remote location.
Core Gold Loan business profitability is reduced.
However, Micro finance business has turned positive and has compensated reduced margin from gold business.
Need to understand the dynamics affecting gold loan margin, though loan business has increased…
Good loan assets is up about 20% YOY but not sure whey revenue growth in gold loans is so low YOY. As far as I know they don’t change their interest rates very often. Anyone know why?
Gold prices should not impact Manapuram unless the fall is very rapid. Almost all loans have a 3 month tenure and are against LTV(Loan to Value) of 75% or lower. This means that loan amount will always be less than 75% of the equivalent gold value. This means that Manapuram is protected from small to medium falls in Gold prices. As long as the fall is not greater than 15-20% in 3 months they are safe as they have collateral value more than the loan + interest.
the most impacted will be insurance companies since Kerala is one of the most educated with high per capita. I think insurance penetration would be high. Natural disasters particularly floods is one reason many lending institutions stay away from North Bihar and some regions of UP. Now this has come to Kerala. Let’s see how does it pan out for NBFCs and banks. Manappuram’s CV, SME and MicroFin biz will be impacted but these segments are still small compared with gold loans. As the article suggests, Muthoot Capital Serv will be impacted more than others.
Can someone post his/her research note on kerala flood impact on Manappuram in term of Business loss and spike in NPA especially Ashirwad MFI? We need to monitor this
In my view for long term investors and even for markets, these things doesnt matter as it does not alter the fundamentals of the business. If there is any downside due to this, smart investors will jump in to accumulate these stocks
As long as there is “Gold” as collateral, nothing to worry due to adequate margin of safety. Infact, lending will increase at this point of time as ppl may be in immediate need of cash due to re-building of properties and business as well.
Disc. Invested as core portfolio. Will be investing more if there is going to be panic fall.
Well Said.
however, concern may be on non-gold loans and especially microfinance portion.
hope the dependence on single state is limited wisely to take care of such events/disaster.
I am not sure of the monetary impact but these kind of events highlight risk associated with high customer concentration in a specific region. I feel market does not like to give high valuations due to these risks. Have seen this geography concentration risk impacting Repco Home (Tamilnadu) and Canfin Homes (Karnatka) due to slowdown in those particular states though for entirely different reasons. Disc: No Holding
