Manappuram Finance Ltd (NSE: MANAPPURAM) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
V.P. Nandakumar — Managing Director
Deepak Reddy — Chief Executive Officer
Bindu A.L. — Chief Financial Officer
Analysts:
Unidentified Participant
Sanket Chheda — Analyst
Digant Haria — Analyst
Shreya Shivani — Analyst
Kushan Parikh — Analyst
Abhijit Tibrewal — Analyst
Pratik Kothari — Analyst
Rajiv Mehta — Analyst
Presentation:
operator
Good day and welcome to the Manapuram Finance Q1FY26 conference call hosted by Dam Capital Advisors Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch on phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanket Chheda from Dam Capital Advisors Ltd. Thank you. And over to you sir. Yeah, thanks.
Sanket Chheda — Analyst
Yeah, thanks. He y good evllo and verening to all of you. We have with us the entire management team of Manapuram Finance to discuss their Q1 apartment which exercise starting with an. Indeed, sir. Joined as a CEO business head, Dr. Roy Varghese who is CEO of Ashiwaj. Microfinance who is head vehicle and h and Finance Mr. Suin P.S. who is the CFO of Manapuram Home Finance, Robin K of Finance.
Without further ado, I will hand the. Call over to Mr. V Nar and. Then maybe Mr. For their opening remarks. We’Ll follow that up with Q and A. Over to you sir.
V.P. Nandakumar — Managing Director
Thank you. Good evening ladies and gentlemen and thank you for joining us on this training call. It is an honor to connect with you as we share a comprehensive overview of our financial and operational results for the first quarter of fiscal 2016. We value your ongoing engagement and support as we reflect our performance and outline our strategic priorities moving forward. Today we would also like to share a snapshot of the gold on and microfinance industries in India and Manabra Finance standing in them. We will also address the effect of recent regulatory changes and macroeconomic headwinds on the industry.
Account search I would welcome Mr. Deepak Reddy as the new CEO of Kalafara Finance. He brings with him over three decades of extensive experience in leading diverse business verticals and managing human capital across prominent financial institutions. As CEO, he will be responsible for steering Manapadam Finance through the next phase of growth and innovation. This includes strengthening the company’s core businesses such as gold loans, vehicle loan, housing finance and digital lending while enhancing organization, culture, leadership, governance and customer centricity. Let me provide an overview of the macroeconomic scenario. Global growth is expected to remain steady at 3% in 2025 supported by using inflation, a weaker US dollar and fiscal support in major economies.
However, macroeconomic rules persist in terms of unresolved trade tension, geopolitical tension. The regional conflicts are set which would undermine the group projection in India. Economic activity in India is showing at pending driven by government recovery, urban spending and stronger credit transmission and is on track to meet the projected GDP growth of 6.3%. Inflation has used to a six year law prompting the RBA to cut the rate and DRR the last few months to boost the liquidity and support consumption. The recent US Tariff announcements on Indian imports is expected to pose limited GDP impact but add to external uncertainty, keeping the INR under pressure until credit clarity emerges.
Given this backdrop, credit growth is expected to improve further as lower interest rates and better system liquidity per lending across retail, MSME and WET to finance segments and we remain optimistic on the evolving macroeconomic scenario. Let me start with an overview of our financial performance on a standalone basis. They recorded a revenue of 1744.5 crores marking a quarter on quarter growth of 0.2% and standalone company earned a patch of 392.1 crore against the path of 414.4 crore in Q4FY25. The consolidated company’s revenue in Q1 stood at 22.65crores compared to 23.29crore of the previous quarter. Our consolidated profit capital tax before other comprehensive income and minority interests for the quarter stood at 132.5 crores to the loss of 203.2 crores of the previous FY 2526.
The board has declared declared an interim dividend of 50% profitability of the consolidated company. Consolidated company impacted mainly on account of stress in the microfinance sector. Our golden business remains a core strength of our portfolio delivering consistent margins and stability. We propose to increase the Gold loan portfolio at a consolidated level of 75% of total loan portfolio in a safe manner to attract more borrowers. We have introduced various Gold loan schemes at comprehensive prices to drive our Gold loan strategy. We also in that augment additional Gold loan customer base through Achirwad leveraging the relaxations in the qualifying asset criteria of MO5.
The proposal of all lending will increase further the share of our goal on the consolidated IEM as well as our fee income. We continue to strengthen our governance structure to ensure compliances with the regulations and provide better customer satisfaction. Along with increasing the share of Gold loan in the portfolio, we plan to grow our housing loans, secure the Amazon lending business and commercial vehicle and auto loan portfolios in a prudent manner within an overall ceiling of 90%. Gradual decline of vehicle has portfolio in the consolidated company will be reduced to 10%. The statute and regulatory guidelines are favorable for the sustenance and growth of NBOCs in general.
The recent regulatory guidelines on Gold Loan is expected to rewrite a level playing field for all the regulated entities. The latest harmonized RBA guidelines on CO lending will bring in harmony between the banks and NBFCs who are operating at a ETHA graphic level. Moreover, Manipura Finance now has the advantage of leveraging Bain Capital’s extensive expertise in financial services within India. Alongside our impressive track record, the Bain Capital investment will be aimed at facilitating the growth of all our non banking financial services business. Dr. Shaina Mehta, Chairman Independent Director will be completing two two terms as per the provisions of the Company Set 2013 and Civil Listing Regulations effective for the 27th August 2025 according to accordingly Board as today’s meeting decided to appoint Mr. V.P. naduruma AMD as a Chairman with FX 8-28-2025.
Now I invite Mr. Deepak Reddy CEO to say a few words and thereafter Mrs. Bindu Ayel, Presidency and CFO to provide a more comprehensive review of our financial performance including detailed segment analysis, asset quality metrics and key financial proceeds. Thank you for your attention and we look forward to addressing your questions during Q and A session. Thank you.
Deepak Reddy — Chief Executive Officer
Thank you Channon and good. Evening to all of you. Indeed a privilege to be speaking to you all and thank you for joining this call. It’s been only a few days since I joined the company and hence it will be premature for me to comment on company performance, current or go forward strategy or to give any sort of guidance. You can expect that from me in the quarters to come. Having said that, I must state that I feel privileged to lead the company into its next phase of evolution and growth. This feeling has only grown stronger since I formally joined the company last Friday.
I am very excited and confident of. Future performance and possibilities of the company. At this stage I can only state that you can expect me to run a transparent and forward looking company that is growth oriented and with a strong culture of risk, prudence, operating rigor and managed by strong and enthusiasm enthusiastic teams. Thank you all very much and I look forward to interacting with all of you going forward and also looking forward. To all your support. Thank you and once again thank you. For joining this call.
Bindu A.L. — Chief Financial Officer
Thank you sir. Good evening ladies and gentlemen. Coming to the key highlights of our operational performance across the businesses, Gold Loan portfolio remains our core strength accounting for 65% of consolidated AEM compared to 59.5% in Q4FY25. Consolidated AEM stood at Rupees 28,802 crore Q on Q growth of 12.6% and 21.8% YoY. In spite of heightened competition we added 3.58 lakh new customers during the quarter bringing the total active customer base to 25.9 lakhs. Average LTV at 57 percentage and 85 percentage of the loan book now sourced through online gold loan platform. Our standalone PAT for the quarter was rupees 392 crore versus 414 crore on account of lower income from the non gold mainly from the non gold businesses.
AEM for Ashirworld including gold loans of rupees 11. 11 crore stood at rupees 6705 which is down by 18% sequentially and 45% yoy. As you are aware the microfinance sector experienced a considerable stress primarily due to the increased borrower defaults from over leverage and led to higher credit costs. This negatively impacted the profitability. Asherwath posted a loss of rupees 267 crore in Q1 compared to a loss of rupees 624 crore in Q4FY25 the net NPA at 1.4 percentage that is 84 crore compared to rupees 177 crore in Q4 and the CRIR at 23.6 percentage. Our vehicle finance AEM at rupees 4492 crore.
This represents a decline of 5.9 percentage Q on Q and up by 1.1 percentage YoY. Considering the asset quality challenges especially from the two wheeler and farm segment, we tightened the underwriting with low disbursement. The GNPA increased to 9.2 percentage as on 30th June 2020 the home loan portfolio reached Rupees1901 crore reflecting a growth of 4.3 percentage Q on Q and 19.8% YoY increase. This business operates from 89 branches and reported a profit of 7 crore during the quarter with a GNPA of 2.87 percentage. Launched to MSME and allied sectors stood at Rupees 3105 crore with a disbursement of Rupees 346 crore.
4Q and FY 2026 are consolidated A M stood at Rupees 44,304 crore reflecting a sequential growth of 3 percentage and 1.4% decline on a YoY basis. Consolidated PAT Rupees 11.32crore an increase of 165 crore 165 percentage over the previous quarter and a decline of 76 percentage. Yu Y capital position remains strong at the CRAR of 28.71% and the net worth at Rupees 12,504 crore value per share stood at Rupees 147.7 ROA of 3.8 percentage on the standalone AUM and the leverage remains conservative at 2.5 times standalone GNPA at 3 percentage and the liquidity position as on 30th June Rupees 4047 crore. The undrawn bank lines of Rupees 3220 crore during the quarter we have seen a minor decline in the cost of borrowings by 2 basis points.
Thank you. Thank you once again for your continued support and confidence.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch on telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of Degantarya from Green Edgewald. Please go ahead.
Digant Haria
Hi. Thanks for the opportunity. The first question is that in the. Gold loan space, you know we have seen good growth qq but you know I see that our yields have dropped from say 22% to say 20 and half. So is this like a conscious strategy or is it because of competition or you know, if you can just give some idea on what’s happened here.
V.P. Nandakumar
So it’s a conscious strategy to bring it on par with leading players in the NBFC industries. So that is yielding results and that is not as per our assessment. That is not going to impact our gold loan income during the current year because of the depression, the yield, the depression, the yield will be compensated by the growth. So in the coming quarters we, we it will be reflected in the result.
Digant Haria
Got it, got it, got it. And just like you know, we are at 20.5, you know, maybe 200 bits more versus competition, we are higher. So you are saying that we will eventually reach that 18, 19% which the general market is. Right?
V.P. Nandakumar
Definitely. With the growth slowly we are bringing down trying to protect our budgeted income from un also.
Digant Haria
Right, right, right. Okay, okay sir. And second is on the microfinance. Have we seen the worst or maybe one or two more quarters of pain? Because some states are doing okay, some states are still not doing okay.
V.P. Nandakumar
The last Congo last quarter also. I told you the waste is over. Now things are coming back and yeah, we are hoping things will improve towards the last quarter. Should turn green. That is our expectation.
Digant Haria
Okay. Okay. So losses would be dropped in my. Shirwad also right from next quarter or it like me. The losses, losses in. Microfinance, losses in micro finance.
V.P. Nandakumar
It will come down. Definitely. It is coming down.
Digant Haria
Okay. Okay sir, thank you so much and all the best.
V.P. Nandakumar
Thank you.
operator
Thank you. The next question is from the line of Shreya Shivani from clsa. Please go ahead.
Shreya Shivani
Hi. Thank you for the opportunity. I have three questions. My first question is on the gold loan book. So we had indicated in the last quarter itself that we are cutting rates so that we can acquire more quest customers. Particularly in the high ticket size. Now the number the customer count growth has been fairly limited. Majority of the AUM growth has come from higher ticket size. So have we just cut lending rates in the higher ticket size or is it across bucket cutting rates? Is it not helping us acquire more customers? Because one would have expected the volume growth also to be contributing to the overall AUM growth. That’s my first question.
My second question is on the MFI book, Asilvad book. So I understand we want to make this book 10% of our overall mix and all that. But somehow your customer count for the past two quarter has been revised downwards. Can you help us understand that? What has been the reason for that? And my third question is obviously on what on the deal, what all approvals are left. Any update that you can give us on that would be useful. Thank you.
V.P. Nandakumar
So first question about Gold long the customer growth because we have started reducing the rate we plan to reduce across the board gradually. So in a very calibrated manner. So gradually you will see the volume growth also customer count also because communication in the community takes pleasant time. Right. So the first response comes from the existing customers and some high holding customers. So slowly you will see this action resulting in better gold order growth in the coming quarters. Regarding MFI book. Yes, we are following the Guardrail set by SROs. Initially we have improved our system and to the systems completely in place the computer system it took some time. So gradually the business is increasing and we are very tight in underwriting the siometric.
Regarding the Bain deal, it is progressing smoothly as expected. CCI approval is already we got. And next we are expecting the NSC BSE approval which we expect may be through in a coordinate. So also the most important approval for the principal regulator RBA that is expected within another one month. Everything is going smoothly. Thank you.
Shreya Shivani
This is very useful. Just, just to follow up the NFI customer count. You said because you have upgraded your computer system, that’s why there has been. An update to the earlier account. Is that the reason? Is that what it.
V.P. Nandakumar
Yeah, yeah, yeah, yeah, yeah.
Shreya Shivani
Thank you. Thank you. So you know.
V.P. Nandakumar
Thank you.
operator
Thank you. The next question is from the line of Kushan Parikh from Morgan Stanley. Please go ahead.
Kushan Parikh
Thank you for taking my questions. So just to happen, the previous participants question we have in the past we have not seen for assets or for the industry that cutting prices, cutting lending rates has helped gold loan growth. Just wanted to understand why I’ll be more confident of getting growth by cutting yields this time around. And secondly, if you could just share the gold loan yield for. For one queue and the gold loan auctions as well. And lastly if we could provide some guidance towards the trajectory of credit cost moderation at that would be helpful. Yeah, those are the questions from myself.
V.P. Nandakumar
So gold loan cutting price we have been doing consistently. So we want to map that to the market along with the leading players in the NBFC industry. So we are doing it gradually as I said in a calibrated manner ensuring that the projected income from go on is also achieved even though the yield reduction is there. So it is done in a paced manner, piloting at various places and seeing success. It is slowly expanding, getting expanded to give wider publicity. We are using social media and better CRMs etc. So the results will be available in the coming quarters.
The NPAs are showing reduction as you seen that the sample is getting slowly improved. So also the quality dispersals with tight and ready using the ESRO guidelines etc that is already implemented. So the collections are improving slowly. So you will see the better results in the coming quarters. And we hope towards the end of this year, the last quarter we’ll be able to turn around. You want to share something
Bindu A.L.
during the quarter 51 crore.
Kushan Parikh
And at the gold loan yield for the quarter.
Bindu A.L.
20.7% average yield of 20.7%.
Kushan Parikh
Understood. This was really helpful. Thank you. That was my question.
operator
Thank you. The next question is from the line of Abhijit Tibriwal from Motil also. Please go ahead.
Abhijit Tibrewal
Yeah, thank you for taking my questions. You just said gold loan yields of 20.7% on 1Q. If you could also remind us what was the yield in the fourth quarter and the related question here. So while Nandikumar sir said that the idea is to bring down the gold lending rates to be on par with the leading gold NBFC players. Right. So I think today the leading gold NBFC players are all at around 17 and a half, 18%. So are we saying that over a period of time our gold loan yields will also gravitate towards 18%? If, if the answer is yes, over what period, over how many quarters can we expect this gold loan yield to gravitate towards that 18%.
V.P. Nandakumar
So we are planning to bring in two similar to the market in a phased manner. So in three, four, around six quarters we are planning and we are expecting the yield reduction matching with the growth will not impact our budgeted income from the gold loans for the current year. So we are, that’s why I am repeatedly telling this is done in a very calibrated manner, saying what is the impact on the projected income and actual income realized income, how is it going to be? So on the base of that the reduction is happening slowly. So I hope in four to six quarters will bring that more or less on par with the leading player.
Abhijit Tibrewal
Got it. And so just a related question. Yeah, yeah, ma’, am, please go ahead.
Bindu A.L.
Last quarter the yield was 22.2 and this quarter 20.7 percentage.
Abhijit Tibrewal
Got it. So ma’, am, almost two and a half percent have been shaved off in one quarter. And then why should it take four to six more quarters for us to get towards 18%? 150 basis points. 150 basis points have been shared.
V.P. Nandakumar
That’s what I told. Yeah, we on the one side we have some projections for the year with regard to gold on income. So we are able to assess whether we are in the right direction to achieve that budgeted income. Accordingly we reduce. So yeah, added to that, we expect the reduction in borrowing costs. So that also will be passed on to the customers so that even before the expected period we’ll be able to match our rates.
Abhijit Tibrewal
Got it, sir. Got it. And then, sir, I mean, given that we’ve already seen a very strong first quarter now internally, what are we targeting for the full year golden growth?
V.P. Nandakumar
We feel like this year will be better than the previous year.
Abhijit Tibrewal
And then I had one question for Deepak, sir. Sir, you already spelled out in your opening remarks that you don’t want to be speaking about the strategy going forward given that it’s early. But sir, given that whenever leaders like you join a company, I’m sure they have something in mind regards to how they want to shape the company. So one thing very clearly, right, what we have articulated as a strategy already is over a period of time we want to bring our gold lending rates on par with the leading gold NBFC players.
And to that end, what I assume is even if that would mean the margins and the ROEs are lower, we want to bring higher leverage on the balance sheet so that we can maybe deliver the same ROEs. So just trying to understand, sir, from you, what is it that you have in mind? Are there people that you’ll be looking to onboard in your leadership team, people who will be reporting into you and just at an overall level, right? I mean, how are you thinking about the company going forward?
Deepak Reddy
Okay, thanks for your question. I want to touch the question and I’ll tell you why. Do I have some thoughts of what we need to do? Do I have some thinking around it? Is there a plan that’s shaping in my mind? The answer is yes, but it’s definitely premature for me. This is five days experience in the company to state at this August forum what exact strategy going forward. You can be rest assured that when once I get a better, you know, better feel of the company, I go further down, I travel, I meet people and validate some of my hypothesis and what I want to do. We will share a strategy at the appropriate time. Very strong thoughts and exciting thoughts. But I’m sorry, very, very premature for me to comment on that at this stage.
Abhijit Tibrewal
Sure sir, I understand that. And lastly, one question for Windu. Ma’. Am. Ma’, am, you said that this quarter the cost of borrowings declined by two basis points. Qq Just trying to understand how is our liability mix positioned, particularly on the bank borrowing side. So do you expect that in the coming quarters, right. Second quarter, third quarter, when banks start passing on MCLR cuts, that’s where our cost of borrowings will start benefiting or how should we think about it? And also a related question, while the portfolio cost of borrowings are down two basis points. Q2, where are we stacking up on the incremental cost of borrowings?
Bindu A.L.
Okay, so on the cost of borrowing what you said is exactly what we have seen from the banking system. So we are seeing slowly banks are reducing the mclr which is beneficial, but at the same time the mix of borrowing we are trying to have or the banks also want to have long term facilities. So the short term, the short term mix is coming down. It is only 26% agency working capital demand on CP is around 4 percentage of, etc. So in the coming quarters we can, we can see the reductions in the MCLR rates which will give us benefit. And with the, I think with the capital coming in all those things we we can see a better negotiation with the bank.
Abhijit Tibrewal
Got it. This is, this is useful. Thank you and I will come back in the question.
operator
Thank you. The next question is from the line of Pratik Kothari from Unique pms. Please go ahead.
Pratik Kothari
Hi, good evening and thank you and welcome to Mr. Deepak Reddy in the company. So my first question on MFI we have gone through this cycle multiple times in the past so has anything changed structurally or on ground that we intend to now cap this at 10 odd percent. I mean we have seen the ebbs and flows multiple times. So why this change now?
V.P. Nandakumar
So the change is in the underwriting policy. So we with the change in regulation we have been following the assessment policy and other regulatory guidelines. Now this post this scenario of from bad performance of MFI Yesros have come forward and and some g. So we are strictly following that then other than that we are not done anything. So we see lot of opportunity there. Also because EMFI with new underwriting standards we feel like the asset quality will remain high. It may go to somewhere near to pre Covid asset quality. And secondly where we see opportunity there is gold loan.
We are in discussion with banks of the opportunity for co lending and few of the banks have come forward with a lot of enthusiasm. And now the revised guidelines as I mentioned earlier has come which are seen very positive with regards to call nt. So that gives a company a wonderful opportunity to grow gold loan. And so this will definitely reshape the company in the coming quarters.
Pratik Kothari
Correct. And second clarification on the gold what we are saying is it’s to attract the high ticket 5 lakh plus customers to whom we have to give lower yields. It’s not for those 50,000 ticket size where we have lower deals.
V.P. Nandakumar
We are gradually introducing across the board for all tickets. Our idea is we customer friendly with regard to pricing in comparison with the market.
Pratik Kothari
So this 5 lakh plus share which I think last quarter we had shared was 15 16%. So where is it now when I mean where are we benchmarking this to say four six quarters out.
V.P. Nandakumar
We are benchmarking 3,000 players. So we as I have been telling this is done in a phased manner in a calibrated manner and on the one side we want to ensure that the budgeted income is achieved and we are able to achieve leverage our capital better. So the pricing depends on the market conditions so we see some stability there amongst the top three four players. Gradually as I mentioned earlier we’ll we plan to reach that level.
Pratik Kothari
So. So where have we reached and what is the plan for six quarters? I mean this 5 lakh plus ticket size. What is the mix in our portfolio right now and what does it have to be or what does this the two three other players have it at.
Deepak Reddy
Least 19% 15 percentage in last quarter.
Pratik Kothari
Yes. And this peers that we want to achieve this is what 25, 30%.
Deepak Reddy
Yeah. From the market we came to know that they are at 30 percentage level.
V.P. Nandakumar
These are not publicly displayed. Right. Fair.
Pratik Kothari
And so you said we our plan is to match the budgeted numbers for this year. So on the gold loan side this was on the revenue or on the profit?
V.P. Nandakumar
On the revenue as well as profit.
Pratik Kothari
And sir last if you can one comment on our vehicle and msme I mean the NPS there have shot up through the roof. I mean we have kind of curtailed lending also that at least the the quarter on quarter the growth is not coming or there’s a degrowth. If you can some comments there. I mean what kind of pain we are seeing where in the cycle are we?
V.P. Nandakumar
In MSME we had around 5% portfolio which was unsecured. So the major challenge has come from that in msme. And another thing this quarter we did some yeah ARC that also has a bearing on the profitability. But now we have consolidated many things and we are hopeful of bringing down the OPEX also by 2% towards the end of this year. That will focus is on the asset quality. So we are repurposing our business to take the average ticket size which is currently around 5 lakhs to around 8, 9 lakhs towards the end of this year.
We have devised strategy for that and we hope that this will improve. This strategy will improve performance. With regard to portfolio we had challenges in some of the segments we were in like farm equipments which we thought it is not our cup of tea so we exit it. Similarly in two wheeler also we have remodeled to an automated underwriting system so that the people cost is reduced. So this has brought down our dispersal but it will gradually become now our renewal strategies focus on slight slightly larger tickets both on the used commercial worklo as well as used car. So this was strategy and there also the average ticket size remains around 67 lakhs. And we intend that to be taken to around 10 plus and attract customers of a relatively higher profile.
Pratik Kothari
Fair enough. No, great. Thank you. And all the best sir. Thank you.
operator
Thank you. The next question is from the line of Rajiv Mehta from yes, securities. Please go ahead.
Rajiv Mehta
Yeah. Hi, good evening. So my first question is on the gold loan industry itself. So sir, are we seeing that the competition has again is going up in the market now for the RBI guideline and the clarity from the regulator about the regulations, are we seeing that more player coming into the market? Are the existing players intensifying their strategy and game? And on the other side are we also seeing that the demand for gold loan is suddenly rising across ticket sizes because the other avenues of loans are not freely available? So much available as before.
So how do you assess the demand and supply side of the gold loan market playing out and whether lowering the yield then in that case should get us the desired volume growth? Because I think value growth is right now. But if the gold price were to stabilize in the future, thus lowering the yield will give us the desired volume growth and what will be that desired volume growth that we would want to be at?
V.P. Nandakumar
So the smaller ticket size that is below 1 lakh there because of regulatory changes like transferring money into bank account etc etc. Is showing some negativity there. Because these small borrowers borrowing up to 10,000, 20,000, 50,000, there is a tendency for going to the unorganized sector borrowers, money lenders. But more and more customers are coming from the higher ticket size. So now with a new regulation concerning gold loan has definitely created a level playing field. There are opportunities there and of course the opportunities for borrowing unsecured loans that is coming down which actually is positive for gold loans.
Regarding competition, any business which is attractive to have the competition. But the thing is for any new player to create an infra like us or some leading players, there’s so many employees, very well trained who can assess the community by the near feel and touch. And also the security infrastructure. Creation of large security infrastructure across India would take time. I’m not saying that it is impossible, it is possible but it takes time and that’s where we stand to gain with a pricing strategy and other strategies in the golden market.
Rajiv Mehta
So sir, if, if say for example, if the gold price is stabilized with this pricing strategy that we are executing, what kind of growth we can maintain.
V.P. Nandakumar
So it will be on par with the market, on par with the markets. When we grow with larger ticket size, we need to understand the attitude of such customers who are of a better profile. So we need to reset our infrastructure. Everything so parallel we are doing all this. So the momentum which will be seen in the large players with regards to the we are confident of achieving that level.
Rajiv Mehta
Okay, okay. And just a few data points on Ashirvad
operator
Sorry to interrupt. May I request you to please follow up the queue as there are several. Yeah, thank you so much. The next question is from the line of Abhijit Dibal from Motil. Please go ahead.
Abhijit Tibrewal
Yeah. Again thank you for taking my question. First thing is every earnings call you share the split of by split of go by ticket size. If you could just help us with that.
Deepak Reddy
Yeah. Up to 1 lakh 36.5. 1 to 2 lakh 21.3. 2 to 5 lakh 23.1. Above 5 lakh 19.1.
Abhijit Tibrewal
So about 5 lakh. What did you say?
Deepak Reddy
19.1 19.
Abhijit Tibrewal
Right. The second question that I had was for Bindu man. Last quarter also you had guided that the peak is now behind. And in this quarter also we saw credit costs coming down in microfinance. So while a couple of participants have already asked this but for the benefit of all of us, if you could just guide on maybe the full year credit costs in microfinance in this year that you are expecting.
Bindu A.L.
So what we have seen Q4 that was the highest credit cost and it is almost half in this quarter. I think as already mentioned by sir last quarter we are expecting a profit from the microfinance business. So in the coming quarters we will see at least 30, 40, 30 percentage reduction from the credit cost what we reported in Q1.
Abhijit Tibrewal
Got it. But this is. This is useful. And lastly ma’, am, in the standalone notes to accounts I was seeing that we have done a assignment transaction in ERC transaction in the quarter. So if you could just help us understand this assignment transaction was in which product and likewise the ARC transaction which pool of NPAs have been sold.
Bindu A.L.
So the ARC and the DEA we are done in MSM secured book. So the DA transaction which is coming at a better pricing. So the net income is only 5 crore from that. So the we declare 150. 160 crore DA and ARC is 50 crore. 50 crore again from the secured book. As these are small ticket loans. NBSCS can get the surface proceedings started with the ARC sale. So the idea is to have a more rigorous follow with the borrowers to collect the money through service C proceeding.
Abhijit Tibrewal
And last question sir, earlier during this call you said that we are in discussion with banks for opportunities in co lending. I just wanted to clarify these opportunities that you’re talking about. You’re talking about co lending opportunities in gold loans, right?
V.P. Nandakumar
Yeah, yeah. Because we as it was around 1600 branches. Out of that 500 branches are exclusively gold loan branches. Then that 1100 branches are offering microfinance. This infrastructure can be upgraded and utilized for gold lending also through cold lending mode. So that the relaxed this qualifying asset criteria we’ll be able to mobilize a good amount of routes. Because Ashurvad is a large network, expanded network and very large customer base and community connection that can be that situation can be taken advantage.
Abhijit Tibrewal
This is very very useful. Thank you for patiently answering all my questions and I wish you the very best.
operator
Thank you. The next question is from the line of Gaurav from Capital Farming Consultants. Please go ahead.
Unidentified Participant
Yeah. Hi. Thanks for the opportunity. I hope my voice is audible. Yeah.
Bindu A.L.
Yes.
Unidentified Participant
So my first question is on gold loan AUM on our stand loan entity parent level Manipuram Finance. So on quarter on quarter basis versus Joe 4 of FY25 our EUN has increased by almost double digit that is 12%. Whereas in tonnage growth is hardly there just 1% number of customers also almost flat just 0.4%. So if you can give some colors on that, what exactly were the factors which helped the company to grow this AUM by 12%?
V.P. Nandakumar
See our LTV remains around 58%. So the gold price goes up. The people simply won’t borrow because the gold price has gone up. Because while borrowing they have the clarity about the inflow of cash cash flow. That way they can redeem within for five months time. So if it fits into their cash flow only, they borrow. So what actually happens is when the gold price goes up, the security they bring in collateral, that quantity they reduce. And when the price goes down, just the opposite happens. Actually price has so much bearing with regard to the aem.
AEM growth is demand driven by the demand. The opportunity is because the unregulated borrowing the opportunities have come down. So this is an opportunity for gold lending growth. And also now with the more players coming in and the banks also another advantage is the popularity of this MO loan is also increasing. That’s why the customers from middle class and upper middle class also use started using that to meet their business requirements and other.
Unidentified Participant
Sorry but within this just a follow up because I’m unable to digest that just because the price of the gold has moved up and that has helped the EU and growth by just 12 percentage whereas the number of customer has remained flat. So CFO ma’ am can help me understand if the number of customers gold customers has remained almost flat somewhere around 26 lakh, right? So within that what percentage of customers were new to Mannapuram in Q1 of FY26 in terms of percentage, right? And what were our existing customers to. Whom the loan was renewed? Because if I recollect it correctly that we have a short term tenure gold loan which we extend maybe three months or six months. Right? So. So. So what percentage of our customers within this work new to customers to manap.
V.P. Nandakumar
No, before that I will. I. I told you one thing is a smaller ticket size. Because of the regulatory challenges these customers have that there is a tendency to move to corn broker that’s up to 1 lakh. So the growth is coming from mainly from 1 lakh plus. So this segment is growing and it will grow. That’s why the number of customers, even the number of customers remained at that level. We are able to get growth because of that, not because of the price has gone up.
Bindu A.L.
So during the quarter we added 3.5 lakh new customers. And the reason for less number of customer addition in the outstanding because the customers mostly we were able to attract in the high ticket segment. So. But the small ticket customers we have seen a reduction. So that is the reason net outstanding number of customers has not changed much. But we were able to add 3.5 lakh new customers. Any other data points we can take offline if that is fine.
Unidentified Participant
Thank you Laura. My second question is our Gold Loan branches are stagnant at 4044 whether it is kyo q basis or yu y basis. So is there any regulatory restriction in opening the Gold Loan branches or we are not keen in expanding the Gold Loan branches across the length and gap of the country.
V.P. Nandakumar
For gold or companies there is a restriction in opening branches beyond 1,000. The restriction is we need to seek prior approval from RBA for every brand. We have submitted application for opening branches and we hope to get it soon. But now the main transaction is under the process, under processing by the rba. So as per this, until this transaction is over, they don’t take up these things. So we are expecting the RBA approval to be resumed by probably by the next month. And without much delay we expect the new branch applications also to be sectioned.
Unidentified Participant
Thank you.
operator
Thank you. The next question is from the line of AGAM from AGAM Investments. Please go ahead.
Unidentified Participant
I mean in. Mr. Mark, can you give a color again? I mean on a non gold portfolio, especially on the MSME side and the weighted finance. I mean for the last few quarters we have been, you know, not growing market asset quality. So what is the thought process here going ahead? How we shooting both Indian World and when can we see a let’s say growth firing across all our console level Book doing that so you can color. On all of it. Thanks.
V.P. Nandakumar
So we have we are restrategizing our business plans now. Bain Capital also has joined their knowledge in the industry also on health. So the growth strategy is to one use the opportunities for to grow golor. As I mentioned we are matching the pricing gradually with the markets and attracting high ticket customers. Like others using core lending models we gradually plan to expand the wolon business in our subsidiaries also. First we are trying to do it in Ashadvad so there’s an opportunity for Ashura’s ongold branches. There are 1100 branches later we are after testing the success we may extend the gold on business to other subsidiaries also gradually.
So we this way we expect our branches to grow golden branches to grow to around 5000 plus towards the end of this year. So as purchase is an opportunity for growth as I said pricing, matching the market plus geographical expansion of this business through our non gold branches through quality these are the opportunities we see the other businesses are in a consolidated consolidation phase one in affordable housing etc. The average ticket size is around 5 lakhs so we are moving to around average ticket size of around 8 to 15 lakhs. So it’s improved underwriting so that when the business is refocused we believe the asset quality will improve.
So also the employee productivity limit. We have drawn up a definite plan to improve the productivity month on month and we are confident that it will improve the profitability of this corona and this housing finance as well as AMR summary vehicles. We are again consolidating in the sense that we are moving out of this risky segment slide. We already moved out the farm equipment and the bringing down the operation two wheeler by automated underrating systems etc so that reduced number of people and also the asset quality is improved because the rating is automated. So this way the non gold businesses are on a consolidated phase and we are confident that these are going to be the opportunities for both the infrastructure as well as business. These are going to be the opportunities going forward.
Unidentified Participant
Okay. Okay. So broadly going ahead the more focus will be on the golden side.
V.P. Nandakumar
That’s what’s planned. That doesn’t mean that we are ignoring the other factors but we are re strategizing strategy. I told you to ticket price to move up from 5 lakhs greater to 10 lakhs because then the employee productivity will improve so the offers can be brought down. Then the asset quality will be naturally better because the underwriting standards are better. Then another thing, one challenge we face is even with the Takeover these small houses where they borrowed around 5 lakhs. The saleability is very low there. The saleability as well as the people’s fear of losing home that price that also would be better. So this way by improving the ticket size, improving the asset quality, bringing the more improving our automated underwriting systems using various technologies, the degree various technologies these are in place.
Unidentified Participant
Sure. Let’s say by this sharing maybe the 35% should this number go down below 20% how should one about this is.
V.P. Nandakumar
Expected to go down and gold is expected to outing.
Bindu A.L.
Now it is 65 and 6535 gradually will reach to 752525.
Unidentified Participant
Will be the rest. So that that would be majorly microfinance and housing or.
V.P. Nandakumar
In my opening remarks already I mentioned we intend to increase our security to 90 and bring down the unsecured microfinance to below 10% of the console area.
Unidentified Participant
Okay. And in terms of on the Ashiba side, in terms of right off and impairment, are we done with this quarter? There is yet some loss to be provided.
Bindu A.L.
So the provisions are based on the slippages during the quarter. So Based on the slippage 70 percentage is the provision coverage ratio. Continuously we are monitoring the collection and based on the slip pages we we have to create provision. So but maximum effort is going for collection.
Unidentified Participant
Are we there in terms of reaching the previous levels in terms of collection efficiency and credit costs?
Bindu A.L.
I couldn’t get that.
Unidentified Participant
Are we reaching those times and trying to judge that?
Bindu A.L.
So we started disbursements with the Titan underwriting norms. But as the disbursement is lesser than the rundown, the book is running down. And wherever collections are showing better, we are focusing more on the disbursement in those in difficult places. We are focusing more on the senders where the collection is better.
Unidentified Participant
Okay, thank you so much.
operator
Thank you. The next question is from the line of Kushan Parikh from Morgan Stanley. Please go ahead.
Kushan Parikh
Thank you for taking my follow up. Just a data keeping question. You share the mix by ticket size for this quarter. Could you share the same for 4Q SY25? Thank you.
Deepak Reddy
To 1 lakh 14.21 to 2 lakh 21.75 to 5 22. Above 5 lakh 16. Sorry. Above 5 lakh words.
Kushan Parikh
Got it. Thank you. Thank you so much.
operator
Thank you. That was the last question for the day. I now hand the conference over to the management for closing comments.
V.P. Nandakumar
So thank you for the active participation and questions which were already relevant. And we look forward for interacting with you. Whoever wants to have the data. We are ready to share with you. Thank you so much.
operator
On behalf of Dam Capital Advisors, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.