Manappuram Finance Ltd (NSE: MANAPPURAM) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
V.P. Nandakumar — Chairman and MD
Deepak Reddy — CEO
Bindu A.L. — CFO
Manoj Pasangha — Co-CEO, Asirvad Microfinance Limited
Analysts:
Unidentified Participant
Sanket Chheda — Analyst
Piran Engineer — Analyst
Abhijit Tibrewal — Analyst
Rajiv Mehta — Analyst
Gaurav — Analyst
Shubhranshu Mishra — Analyst
Prithviraj Patil — Analyst
Pratik Kothari — Analyst
Bharat Singh — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Manapuram Finance Limited Q3FY26 earnings conference call hosted by Dem 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on attached and phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanket Chera from Dam Capital Advisors Ltd. Thank you. And over to you, sir.
Sanket Chheda — Analyst
Yeah. Hi. Very good evening to all of you. We have with us the entire management team of Manapuram today to discuss their Q3 results. So with us we have VP Nanda Kumar who is the chairman and MD. Then Dr. Sumita Nandan who is an ED. Mr. Deepak Reddy who is a CEO. Ms. Bindu Al, who is the CFO. Ms. Mano.
operator
Your voice is not audible. Slightly breaking.
Sanket Chheda — Analyst
Yeah. Is it audible now?
operator
Yes. Yes, go ahead, sir.
Sanket Chheda — Analyst
Yeah. So. And. And CEO, Manapuram Home Finance. And Mr. Robin, CFO, Manapuram Home Finance. Without ado, I’ll hand the call over to Mr. V.P. nanda Kumar for their opening remarks. After which we’ll follow up with question and answers which which would be say conveyed by Deepak Reducer and Sumitanandan Ma’ am also. So over to you Nankuma sir, for your humbling remarks.
V.P. Nandakumar — Chairman and MD
Thank you. Good evening ladies and gentlemen. It’s a pleasure to welcome you to Manapura Finance 23 FY26 earnings conference call. Firstly, I would like to thank our investors and analysts friends for their continued interest, engagement and valuable insights which remain integral to our journey of building a resilient and sustainable financial institution. Economic Scenario the Indian economy, underpinned by strong domestic consumption has remained resilient amid global geopolitical uncertainties and imposition of tariff. Historically high GST collection, PMI showing an expansionist view, strong vehicle sales, etc. Retracement the resilience of Indian Economy Our economy is projected to grow at 7.2%, making it one among the fastest growing economies in the world.
With government policies Favorable for growth, NBFCs play a significant role in the growth story by ensuring financial inclusion and easy accessibility to funds. Manabram is well positioned to ride the growth curve through its flagship product gold loans and offering Amazon microfinance and home loans mainly to cater to small businesses and individuals at the bottom of the pyramid. Operating environment. The third quarter of FY26 unfolded against a mixer operating in backdrop of the NBC sector. While macroeconomic indicators, particularly consumption demand and rural activity showed gradual improvement, the lading environment remained competitive and tightly regulated with heightened emphasis on asset quality, pricing discipline and regulatory compliance.
From a sectoral perspective, gold loans continue to demonstrate resilience supported by favorable gold prices and steady demand for short tenure secured credit. At the same time, certain unsecured and semi secure segments across the industry, notably Microfinance continued to face challenges with borrower cash flows and collection efficiencies under close monitor. Financial performance overview for Q3 FY26 Manipura Finance delivered a stable and measured performance anchored by the strength of whole loan franchise and disciplined risk management across portfolios. On a consolidated basis we have reported a consolidated mode 52,125 crore up by 13.8% QoQ and 17.9% Yum driven primarily by expansion in gold loan AEM.
Our consolidated gold loan AEM for the quarter was 38,754 crores by 23% Q on Q and above 58.2% by UA supported by gold price and strong customer demand. Consolidated gold tenet was 58.9 up by 3.2% QRQ and up by 2.9% for uni. Console patch for the quarter was 239 crore up by 9.8% POQ and down by 14.3% YOA. Our nine months ended console patch outstanding at 588 crore. Importantly when assessed through the lens of our core business, the underlying earnings profile remains healthy. Our liquidity buffer and provisioning coverage continue to provide both comfort and flexibility as we navigate near term uncertainty standard on business performance.
Our standalone AEM stands at 44,209 crore up by 60.9% QoQ and up by 36.3% YOA driven by four loan business. Our standalone path was 381 groups up by 1.3% QoQ and down by 15.9% YOY. Our nine months ended extended loan patch was standing at 1149 crore microfinance in Ashurbat. Microfinance continued to operate in a challenging environment during Q3 FY20 while broader sector is showing early signs of stabilization. Credit costs remain elevated reflecting our cautious pushing stance and conservative recognition of stress. Hyderabad AEM stands at 6091 crore including gold loan AEM of 1610 crores so down by 1.2% Q on Q and down by 39.2%.
Year on year loss was 156 crores in Q3FY26 versus 168 crores in Q2FY26. It was improved by 6.9% sequentially and improved by 16.9 to the Nuyori net and BS stands at 1.8%. Our diversified lending business including political finance and affordable housing finance moderated with a clear focus on asset quality and risk adjusted returns rather than aggressive expansion. Our balance sheet remains robust with the capital adequacy comfortably above the threshold and ample liquidity on hand. Funding diversification remains a priority and our access to bank funding, market instruments and DCBs providing stability in managing our customers. Strategic priorities and outlook hold on.
Business continues to be a 4 growth engine for Monoco Finance Limited supported by favorable structural and regulatory tailwinds industry wide. Gold Loan AEM is expected to scale sharply over the next two financial years driven by elevated gold prices, a rising prevalence for secured credit and regulatory streamline. Against this backdrop we remain well positioned to capitalize on the next phase of sector. The Board has declared an interim dividend of 50 pais for this quarter. With that I now invite Mr. Deepak Reddy CEO to provide business insights following which we’ll be pleased to take your questions. Thank you.
Deepak Reddy — CEO
Thank you sir. Ladies and Gentlemen, good evening and thank you all for joining this call. Last quarter I laid out to you a set of what I call six priorities as we transform the business. As Mr. Nandukumar has shared our performances in the quarter, I thought I would give you an update of how we are progressing on our priorities and how confident we feel on things at this stage. I’m happy to state that we are progressing well on all of them and I continue to remain very enthused about the possibilities. Also, to reiterate what I mentioned last quarter, you can expect me to give you a full strategic roadmap for the company and firm guidances from next financial onwards and as we close next year’s operating plan.
On my priorities I laid out, my first priority was on accelerating gold which our Chairman also talked about. We are making good progress and you would have seen from our results. Our AUM growth momentum has rebounded strongly. We continue to run multiple price sensitivity tests to determine the ideal scheme mix as we move into next financial year. On gold I talked about four sub priorities. One was on improving our branch infrastructure. Our new branch design is ready in the final stages of negotiation as our vendor partners and we are getting ready to next year completely transform our branches.
The experience for our customers and the controls we have in the way we. Work at our Gold loan branches we. Talked about last quarter about building on our digital journeys and going paperless. We’re making good progress here again and targeting to go paperless for most of our customer acquisition processes in the next one to two quarters. This will not just ensure better customer experience but but will help us improve our portfolio quality and controls. Also I talked about introducing a new. Best in class AI security systems in our branches. I’m happy to say that we have closed on our model and partners and we are now getting into the implementation phase. From this month onwards cold lending is a big priority for the group and I’m happy to say that just this week we have gone live with cold lending which will give significant returns profile to our subsidiaries. Also my second priority was on a consolidate to grow strategy for our non gold businesses. As seen from our results we have to significantly improve on our credit performance and profitability here.
Towards this we have as of now significantly scaled down all these businesses and the geographies in which they operate including for MSME and vehicle loans. We have additionally paused car loans, new and used and farm equipment loans. Underwriting norms have been tightened and our collection infrastructure is gaining momentum. We are also working on stepping up our LOS platforms for MSME and vehicle loans to ensure our processes are more streamlined and controlled. We hope to go back to a growth mode from quarter one FY27 onwards after strengthening our systems, processes, controls and teams. My third priority was around organizational effectiveness.
Our new delive organization structure is beginning to show effectiveness in terms of operating rigorous and ownership and ownership by the teams is something which is very dear to me. I must say I’m very enthused that teams are adapting very positively to this change and this gives me great confidence in delivering our growth aspirations. We are also shortly rolling out a very comprehensive set of changes to our people and HR practices which I’m confident will further infuse and bring better business momentum and ownership to the organization. Simultaneously we are mapping out all our processes currently towards making them simpler and more efficient.
Priority 4 I talked about infusing top talent. I mentioned that we are onboarding a top quality leadership team. A new group cfo, a Group Compliance Officer and a Group General Counsel have already joined us around actively leading the transformation efforts and that they’re already making their presence felt in a very positive way. We are in the process of also onboarding new group heads of Technology Risk, Internal Audit Operations, HR and two group Business heads. Some positions in levels below are also being actively staffed where required. Royalty 5 was getting ready for the medium to long term.
Even as the long term evolves towards this, we have kicked off an engagement with a very large firm towards determining our go forward technology stack. This is expected to take a two to three years migration to fully evolve into a new age digital technology stack. We are also simultaneously working in determining various solutions that can be quickly plugged into even as a new stack goes live. Our go forward product strategy is also being worked on and when we talk to you about our new strategic plan in quarter one of next year, we will share the same with you on our subsidiaries.
Because my next priority building our subsidiaries, I must say that Ashur is showing very encouraging signs and I’m confident that we are at the tail end of the negative credit cycle. Business volumes are showing good growth, collections are improving and our new book performance is performing very well. Our new book today is approximately one third of our portfolio and as we get into, let’s say quarter two of next year, it will be approximately 57 to 60% of our portfolio which will add to the overall performance. We used to have a lot of negative growth which means degrowth.
We used to have higher degrowth than Au1 buildup. I’m happy to say that we have largely taken care of that and the degrowth as we end December is only 1% and you’ll go into positive territory as we speak. Lot of credit parameters including the number of customers of ours who have more than 3 loans, customers of ours with more than 2 lakhs etc. Are showing extremely good and encouraging signs and business growth coming back even as we tighten our credit parameters is something that envisages me. The organization is clearly being galvanized for strong growth and performance, portfolio and portfolio performance in FY27 our housing finance company as I mentioned last quarter is a strategic priority for us and we have very strong plans for a housing finance company.
A top quality team is being put together for the same and should be in place by quarter 1 FY27. Till then you can expect low to moderate growth in the housing finance company. I’m aware that these are fairly simple priorities that I have laid out for now, but I believe these will be the foundation of what is to come in the coming years. Thank you all for your continued support and for being a part of this transformation journey along with all of us.
Bindu A.L. — CFO
Now we can go for the Q and A session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press Star in one on the Touchstone telephone. If you Wish to remove yourself from question Q. You may press star in two. Participants are requested to use answers while asking a question. Ladies and gentlemen, please wait for a moment while the question queue assembles. The first question is from the line of Korn from Sconfield. Please go ahead.
Unidentified Participant
Am I audible?
operator
Yes, sir.
V.P. Nandakumar
Yes.
Unidentified Participant
Yeah. Thank you so much for the opportunity. The first question is on the gold AUM growth. I just want to understand if we look at the gold customers, that’s about 1% increase quarter on quarter. So you know, the AEM growth is very good at 23%. So how should we think about, you know, how much of that is gold price driven and how should we think about the gold AEM growth when the gold price stop moving up.
Bindu A.L.
The ticket size during the quarter we have seen an increase, especially our strategy with a lower yield for a high ticket customers. So the AEM growth is almost 22 percentage but the growth in number of customers is not that much because of our strategy by shifting to higher ticket borrowers.
Deepak Reddy
If I would just add to what Bindu has stated. I mean I think we must take into Cognizance 2, three other facts also which come into play in the gold loan business. There is something called customer prudence also which comes into play because these are the jewels of the family and these are very auspicious in our country. If you look at the LTVs, both weighted average and simple average LTVs of our portfolio, they remain the same prior to gold price increase and now they all hover between 57 and 60%. So it’s not that because the gold price is going up, our LTVs are going up.
So to your question, do you see significant risk now? Let’s say the price of gold falls significantly. There will be for a short temporary period of time. Yes, there could be a small connection that we had, but that is always temporary. It has never been beyond at the most three, four months and two, three months at the most. So we are not, we don’t too concerned about that. I must say also let me say worst case scenario, gold price comes down. Also I would say that our company is very strongly poised to be able to manage the situation because we have an advantage in our online gold loan portfolio, the online gold loan app which most of our customers transact on.
It’s very easy for them to repay and make sure that NTV regulatory LTVs are met and they don’t have to. Customers don’t have to keep rushing to branches which a lot of our competitors will have to do. So I think they’re fairly strongly poised. Even if there is a connection seems unlikely today. But you never know because the price has very high gone up. It shouldn’t really be too much of a worry to us other than as I said one, two months, we should be fine. Another thing I must state is gold. Loan as an asset class has got fully established in India today over the last one year. It is the largest retail asset lending class in India. So gold loan is today a great product not just for negative times in the economy. Normally in negative times in the economy when the price of gold goes up, it’s a great product for negative economic times, it’s a great product even for normal economic times because customers are saying this is a fabulous product for them to take. It’s easy to avail. The repayment obligations are in their control, how the product is structured.
So that’s how it’s already established as the largest retail lending class over the last one year. So largely on gold, I think we are, we have a good story in the country.
Unidentified Participant
Yeah, definitely. Thanks so much Sarah. And just on the yield perspective, how should we think about the gold yield going forward? Showed cycle down further to 80% as we talked about earlier or how should we think about that?
V.P. Nandakumar
Yeah, the yield will be similar to whatever is in the yield in the market which is being charged by leading players. We will be with that. We are already that range. So we continue to be with the market. I mean to answer, please go ahead.
Unidentified Participant
Sorry. So it’s 18.5, 18.3% in terms of a gold yield already in line with the market for your segment or because we’re also on a shift to larger ticket size customer. Right. So we just want to understand that 1, 2/4 on the road, how should we think about the gold yield?
Deepak Reddy
This is similar to the other leading players in the market. So we will be maintaining, as I told, we’ll be maintaining more or less the same rate as other leading players. So they also have this larger tickets. So the average will be like that. So we don’t expect much change.
Unidentified Participant
Got it. So just one last question about borrowings. If I’m not wrong, it seems that the borrowing has went up about this quarter much more than the loan growth. I’m just wondering, given that the bay is expected to inject capital, why do we need to, you know, take so much boring this quarter?
Deepak Reddy
So Bain approval is in the final stages with rbi. So we got some interim approval. But we, we have saw Bain has sought some clarifications in that regard, etc. Etc. So and they have made some submissions also. That’s why the final approval is yet to come through. So we expect the final approval to come through without much delay. Maybe we expect that to happen within another one month.
Unidentified Participant
Thank you so much. I’ll join the queue. Thank you.
operator
Thank you. The next question is from the line of period engineer from clsa. Please go ahead.
Piran Engineer
Yeah. Hi team. Congrats on the quarter. Just a couple of things on the opening comments. So Mr. Reddy, when you said that you all are conducting like price sensitivity tests to improve the scheme mix, can you just elaborate on what you mean by that?
Deepak Reddy
So in the past we have, you know, we used to be, we had taken a strategy of pricing at the upper end of the market. Now. Over this year we realized that we had to, as our chairman said be benchmarked with competition, which is what we have done. And we are running various tests. That’s a constant process. But we run it very closely here in terms of geographies, customers, locations, tiers, when we check what the sensitivity levels are. And this is what we’ve been doing to, you know, to fine tune it because you know, we move from a position of, you know, being priced higher than market to a strategic call to be priced at market.
Piran Engineer
And so does this mean that in geography one, let’s say Tamil Nadu, hypothetically you are offering a 50,000 rupee loan at 19% and in Maharashtra you’ll offer it at 18%. Because the crowd in Maharashtra is different.
Deepak Reddy
That’s the competition is different, competitive factors, density of branches, how, you know, how evolved the market is in the state. All of these go into pricing decisions. Typically the early stage was south Indian states of, let’s say Kerala and Tamil Nadu where density of competition above branches is very high, competition levels is very high. And then you take different pricing strategies for different locations. And as I said, we are getting ready for, we are already showing very strong growth. We are getting ready for, for much more significant growth and a lot of tests that we’re doing.
But I think the takeaway you can take back is from being priced above market. Vandapuram, you can expect to price at market going forward. We have shown that in the last quarter and the results will come through. You see leverage benefits come through very strongly in the quarters to come.
Piran Engineer
So on a journey on a scale of 1 to 10, where are we in the journey of getting priced in line with peers? We are already at 10, is it.
Deepak Reddy
I mean that’s a tough question to put a number. So I don’t want to put a Number. But you ask me, I would say around eight. Around eight or eight and a half. I would say, I would say, I would say we are almost there. We are almost there.
Piran Engineer
Got it. Got it. And then secondly, you also mentioned, you know, a number of initiatives like transforming the branches next year to improve the customer experience. You’re working with a consultancy firm to develop the tech stack. How should we like these are obviously very good initiatives for the long term and they’re important. How do we think about how OPEX trends in that regard in FY27 and maybe beyond?
Deepak Reddy
There will be some investments, a lot more capital investments that we are going to put in. But I don’t think we are in the process of making a budget for next year. I don’t think you should be overly worried about that. I mean of course there will be some investments but the initiatives will also result in cutting of OPEX where required, in optimizing of the OPEX where required and also leverage benefits coming in as a sort of versus OPEX as a percentage. You should see all those leverages coming in. So I don’t think you need to be overly worried about that.
Let’s say the new structures they’re putting in, new people putting in will have to pay for themselves and much higher productivity.
Piran Engineer
Understood. And just lastly, just repeating the same question of Zeeswan earlier and this is probably to Bindu but like borrowing growth being higher than loan growth, is it just simply back ended because borrowings have grown like at 20 or 29%. I’m just talking standalone balance sheet. So is it just like a end of period phenomenon or was it like just throughout the quarter? And if it was throughout the quarter then why was it so high?
Bindu A.L.
It is end of the quarter only. And if you see our liquidity position, we have almost from 15002000 times to 4000 crore as we were getting a lot of limits at the end of the quarter.
Piran Engineer
Okay, so just the end of period phenomenon.
Bindu A.L.
Yes, yes.
Piran Engineer
Got it, got it. Okay. Yeah, that’s it from my end. I’ll get back in the queue and wish the team all the best.
Bindu A.L.
Thank you.
operator
Thank you. The next question is from the line of Abhijit Tebrewal from Motilal Oswal. Please go ahead.
Abhijit Tibrewal
Yeah. Good evening and congratulations on a strong gold loan. Growth again kind of circling back on the yield for our yields have actually declined from 19.7 last quarter to 18.3 this quarter. So I mean while these are portfolio yields, what I’m trying to understand is what that essentially means is the Gold loans that you would have done in this quarter would have been even lower yields, right? Basically somewhere around 17, 17 and a half. And earlier when CEO sir said that maybe on a scale of 1 to 10, we are at 8, 8 and a half.
So eventually you expect these yields to stabilize around that 17.5% market.
Deepak Reddy
No, we would expect the yields and of the way the market is operating today condition our expectation is in the range of 18. But I mean that’s where we expect it to be. No question it is let’s say message because we have a very unique and a very strong customer proposition in our, in our online digital golden app OGL app. And you know, so that, you know, as a result of that our pricing transmission of between onboarding and book yield is much faster than that of competition. So you know, I view that as a positive thing both for customers and us.
So our expectation is in the range of you know, 18, 18, 18.1 up to maybe 18.15 depending on how things go is my expectation.
Abhijit Tibrewal
Got it. So essentially that also I am guessing would be done by the end of this year and then from next year onwards we should look at stable yields. There’s a question I had was on this Bain transaction, I’m sure earlier in the call Nanda Kumar sir commented on it saying that we received some kind of an interim approval in the final approval is expected to come through in the next month. Sir, I’m just trying to understand. You remember also a media article that came out and then we also refuted it or we clarified on that on the stock exchanges.
But at least, I mean that problem which was highlighted in that article of RBI not being okay with being having majority stake in two NBCs. Has that part at least been addressed with the regulator?
Deepak Reddy
Yeah, it is. It is not majority stakeholders. Controlling interests, controlling interest. Right, sir. Right. I’m sorry, yeah. Controlling interest in both the controlling interest. But that part of Bane is working out something whereby this is addressed. So we are in discussion with RBA and yeah. And whatever RBA has told Bain is ready to go by that. So that will not create any problem with regard to promised investment in Manapuram as well as the joint control in Manipuram.
Abhijit Tibrewal
Got it. So essentially sir, I mean if I understand this right and whatever the RBA is suggested, Bain is happy to go ahead with that so that you can get a control. Joint control. Anyway. Anyway.
Bindu A.L.
Yeah. Whenever we get the information everywhere.
Deepak Reddy
Yeah. So one thing is very clear. Yeah, Bain is interested in.
Abhijit Tibrewal
Got it sir. And so then lastly rather two last questions One is we discussed about this customer number of customers earlier but today all I’m trying to understand is when we look at gold loan NBFCs, right this thing around number of customers not growing a lot, see tonnage, we understand like you’ve explained to all of us in the past that when gold prices go up, it is not important that the tonnage also goes up because customers are prudent and they borrow only as much as they want. But the fact that the golden customers are also not increasing at the industry level.
And despite that, if we are seeing gold loan growth, how should we read that? Is it like more number of gold loan players coming and which is where no one is seeing a gold loan customer growth or is it like these are the same set of customers who are taking gold loans, just that they’re taking higher ticket sizes now, which is what is driving the gold loan industry growth.
Deepak Reddy
So if I can take this question, it’s an interesting question and I think I request you to view it from a perspective of growth cycle. So as I mentioned in the past our pricing in the past years was slightly higher than that of competition. At that time we thought it was prudent and right thing to do. And as a result there were some of our customers who for years were very loyal to us. Some of them may have moved out of us. Now the price loan growth, the gold loan price has been going on for almost one year right now.
Now this quarter you would have seen a significant take up rate and catch up with our growth rates. A big uptake in happening. That’s the first part of the cycle. The second part of the cycle is once the business growth comes, branches being infused, right? Pricing that we have in the market. And the second cycle will now lead to much higher new customers also being acquired because the whole teams are getting galvanized. So I think what you’re seeing last quarter growth of significant growth compared to our previous quarters is step one, step two, you will move into this.
But we are fairly enthused at this stage.
Abhijit Tibrewal
Got it sir. And then I just want to squeeze in one last question. While we have shared that our yields are now comparable to other prominent gold loan players and likewise the margin spreads are also comparable to the other golden players. This OPEX bit, right? I mean if I would look at our ROA3 right. Versus the ROA3 of our peers, I think it is that OPEX, right. Which is significantly lower for some of our peers, right? So what is it that we are doing on the OPEX side? Is it just Scale, you think, which will help you bring down the OPEX and translate into better ROAs going forward and better ROEs as leverage comes or are there also other things that you are doing, steps that you are taking for opec? Thank you so much.
Deepak Reddy
I think the answer is in your question. It is all of them. It is both scale which is very important of course, but also a significant process improvement which as a result brings down our costs also are things that we are working on. So I mean the answer was in your question, sir.
Abhijit Tibrewal
Got it sir. This is very useful and thank you for patiently answering all my questions. I wish you and your team the very best.
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. Congrats on stable numbers. My first question is on the non gold portfolios. So how deep can this you know, asset quality endpield explanation, you know phase go in vehicle and equipment finance in msme personal loan, housing finance because we are seeing spikes in the NPAs. So when do you, you know at what levels can they peak out and by when they can peak out and just to understand the credit cost impact incremental because of that, what is the current PCR that they’re holding on the existing NPAs on each of books and would it be right to presume that you would want to address this in terms of provisions or recognition largely in Q4 itself so that you can start FY27 on a lighter note.
Bindu A.L.
So on vehicle finance if you see as the disbursement slow down it is more on account of the residual impact. So the quarterly increase is only some 40 crore in the vehicle finance book on which the provision currently we are doing is still around 25, 2027 percentage. So that is the provisions we are doing but at the same time we are doing a current valuation of the assets and any kind of shortfall we are providing and above 730 days also we are taking 100 percentage write off. Similarly for MSME all unsecured loans, the net NBA zero digital personal loan or the small portion of unsecured we took a 100 percentage write off.
And on the secured portfolio as the average LTV is very low and the ECL with a five year realization period is around 5:6 percentage. But the assets in case of vehicles and lands comparatively easy to repossess and sell, we will see improvement. But of course MSME will take more time and the customers are servicing the AMI with delay.
Rajiv Mehta
Okay and in Ashirawad can you, you know Share the X bucket collection trends. And if I were to look at your sage 2 and the net NCN figures, would it be right to assume that the credit cost in Q4 itself will come meaningfully down from what it was in Q3?
Bindu A.L.
Yeah, we have shared the details in page on Asheva, the bucket wise details and if you see 32 the stage 2 as on 31st of December is only 106. So the trend shows a drastic improvement in decline in NPA in Q4.
Rajiv Mehta
No, I was asking about Mandx bucket collection efficiency in Ashurbad in recent months. How much that is? I know that we have a lesser amount of new portfolio but how much is the leakage still happening?
Manoj Pasangha
Yeah, Manojo here. I’ll just answer the expert if you see I would rather answer that question to address both the new book and the old book in our collection efficiency in our new book is at 99.78% which is roughly translating to 1/3 of my book. And like how the CEO had mentioned earlier, in the next two quarters we expect this to reverse in the sense that we should be looking at 2/3 of a book, our entire book, and running at similar collection efficiencies. So that is how robust it is currently. So that’s on the X bucket.
Having said that, even the balance of the 1/3 which is the old book, we are seeing a collection efficiency increase about 2% quarter on quarter which establishes the fact that we have not let the old book slip away. So we have put together a collection team from within the loan offices spread across our branches where they’re dedicated to focus on this so called old book. And the hard book that should take. Care of our collection efficiencies.
Rajiv Mehta
Okay, clear. Just one last one. Cost of borrowing, your standalone cost of borrowing has declined by 30 basis points. Q and Q But the console is only declined by 10 basis point. And when I look at ASHRA also the cost of borrowing is actually flat.
Bindu A.L.
Yeah, so almost 85% of the borrowings standalone at 880 and the balance asher was around 12. Percentage of console borrowing at 1020 and home finance at 950. So the weighted average is coming to 898.
Rajiv Mehta
That is actually declined only by 10 basis point because the standalone cost of borrowing has actually come down by 30 basis points and Ashwad is flat. So I was thinking that the delta improvement in console level should have been higher than that.
Bindu A.L.
So one reason is towards quarter end we are done lot of borrowing. So we will reconcile and get back to.
Rajiv Mehta
Okay, thank you.
operator
Thank You. The next question is from the line of gown from Sconsil. Please go ahead.
Unidentified Participant
Hey, thanks so much again. Just a follow up questions. Number one is on the consolidated statements under the revenue there’s this other line which was 27 crores last quarter. In the December quarter it jumped to 79. Almost 80 crores. Just wondering what’s that about? Is there anyone off in there?
Bindu A.L.
Can you repeat the question?
Deepak Reddy
Can you repeat your question please? We just missed you in between.
Unidentified Participant
Yeah, yeah. In the other revenue which is, you know if I look at your financial statements consolidated under the others under revenue from operations there’s a 79 crores revenue over there which was 27 crores in the September quarter. So there’s a wider large jump and you know, anyone else.
Bindu A.L.
We will share offline if that is okay.
Unidentified Participant
Okay, sure. Thank you. And lastly on the standalone RA which is something about 3%. Right? 3% right now, you know it’s one to two years. How should we think about this RA going forward? Since our yield is let’s just say continue to stay here. How should we think about ratio on a stand on business. ROA going forward?
V.P. Nandakumar
Yeah, we hope to maintain and grow upon ROA because the per branch business is growing. Yeah. So this year also we have seen growth and we expect that momentum to continue. Continue. So there will be a huge volume push at the. In the branches. So. And the OPEX, HR cost etc etc. Will not have much impact. So. And we don’t expect much increase in the borrowing cost. So as a ROA.
Deepak Reddy
Would say. Yes sir, we should definitely be looking at 4.25 to 4.5 I think.
Bindu A.L.
Yeah.
Unidentified Participant
4.25 to 4.5 stand among ROA.
Deepak Reddy
Yeah.
Bindu A.L.
Yes, the credit cost.
Unidentified Participant
Okay. So that means.
Bindu A.L.
Yeah. Credit cost issues in the non gold books will also come down. So that will.
Manoj Pasangha
I mean is it where we want to be? I mean the specific answer is no. But as I said, you know we have a non book of vehicle loan MSME which is, you know there will be some amount of impairment that we will see for 1, 2/4. So that’s why we are factoring this when we talk to 4.25 to 4.5.
Unidentified Participant
Thank you so much.
operator
Thank you. The next question is from the line of Gaurav from Capital Farming Consultants. Please go ahead.
Gaurav
Yeah. Hi. Thanks a lot for the opportunity. So a couple of questions. First question is to Mr. Deepak. Like you mentioned that you are also working on co lending, right. And this week only you have made it live. So. So just a Clarification on that. Is it the co lending agreement with the Ashiwa that has been done because I think on the website of Aisha something like that has been displayed that co lending.
Deepak Reddy
We are working with multiple partners right now and Ashurbad is one of them. And in all three of all partners that you’re working on, hopefully minimum of three partners should go live over the next one. Two weeks I would say or three. Weeks at the bottom.
Gaurav
That’s great. That’s great. Second, I was referring this slide number nine of our presentation, right? So Gold Loan. Everyone in India who is taking financial sector nowadays aware that Gold loan is booming, right? As an industry but for us as a company, right? Every other segment where we are operating, whether it is vehicle finance, equipment finance, MSME lending or even housing finance, our NBA level, GNP level, right? In housing finance we are approximately 5% vehicle finance we are approximately 14% MSME. Now we are touching around 6% right? Where things are going wrong because such a elevated level of gnpa, right? Coming from a lender like who is focused on gold loan, right? Who knows that asset quality must be pristine, right? So, so where things have went wrong, have we analyzed that part while we have done the all the course correction in last two, three quarters or something, some kind of accountability has been set.
Up or. How you would like to assure that whatever the balance assets we have, they are now remaining the pristine quality and not some other surprises which we might expect in a quarter or two down the line. Yeah, that was my second question.
Deepak Reddy
So you could see our importance and seriousness of our thinking in the fact when I laid out my priorities, my first priority was accelerate gold and my second priority was to follow a consolidated goal. Consolidate and grow strategy for non gold. That’s the order of the priorities. To tell you how seriously we are taking it, I don’t think we don’t have to dwell on a postmortem of what went right, what went wrong. It’s a learning. We have obviously studied our entire models from acquisition to business to underwriting to risk to systems. We are taking that all into cognizance and that’s what we are strengthening till that that’s fully in place.
That’s why I told you MSME and vehicle loans, you will not see much growth even in the current quarter. It’s only as we get into next year you will start seeing growth and we will correct, you know, we will correct it. And have we taken specific questions that you asked? Have we seen why what went wrong? Obviously yes, because we know starting point was if it is high, why is it high? What do we have to do to control it? What are the controls you have to put in place? What are the systems you have to put in place? What are the different processes and credit policies, underwriting policies, risk policies, all of these have been taken into consideration.
That’s what we’re working on and that’s why I said it’ll be a slow take up. These businesses are not something that you’re going to overnight accelerate. We will get our process in place, we’ll be comfortable with it and of course then we will grow them. These are, we intend to grow these businesses. But when we are confident that we have learned from the past and our. Go forward is strong,
Gaurav
that’s great. If you allow me one question within this, within this, just a follow up on this. Can you give some clarity? What percentage of within this GNPA segment across the products that we have, what would be the percentage of customers those who are defaulting in each of these categories like one customer who is defaulting in HFC housing finance also and to whom we had given the vehicle finance also to whom we have given the MSME loan for the business purpose also. Right. Or microfinance loan also. So are there any certain set of customers in percentage terms who are defaulting in more than two, three categories or these are exclusively different set of customers.
No correlation over there?
Deepak Reddy
No. So you’re talking about customer level NPAs of customers across a group. I think they’re very, very very minuscul offhand. I’m sorry I don’t have the exact number with me offhand. But that’s something that we look into very closely and that those are things which are monitored also very closely by us. It’s very minuscule. I mean and our customer level NPA policy takes that into consideration.
Gaurav
My last question I have asked in my couple of instructions also in last con calls on branch expansion. Right. Specifically on the Gold loan side. So is it like there is something which is stopping RBI to give us branch expansion approval or is it related to Bain transaction? Once that is done by RBI then only the RBI will give us approval for branch expansion or we are not going to be RBI for seeking approval for branch as of now. So, so what exactly is the roadblock or shortstopper which is not giving us an opportunity to expand the branches specifically for the branch?
Deepak Reddy
I think I explained that the point in our previous earning calls also this is of course, I mean I can’t speak on behalf of the RBI why they Are giving or not giving? That’s not what I can speak about. But I believe it is also because there’s a very significant transaction with a new co promoter coming on and I think that’s the first priority which probably the regulator is also looking at. We don’t see any reason why we will not get approvals shortly. We hope to. We have put up our proposals to RBA which we hope will be favorably decided upon.
And is there any specific reason that you think that we have, why we are not getting hunting that the answer is absolutely not. Nothing.
Gaurav
Thank you. I will come in follow up. Thank you very much.
operator
Thank you. The next question is from the line of Sri Branchu Mishra from Philip Capital. Please go ahead.
Shubhranshu Mishra
Hi Deepak, good to hear your voice here at Manapuram. Given the fact that you’re pretty much outlining, outlining to change the organization at various levels. One, if we can maybe in the medium term, two to three years from now. Second is, you also spoke about LOS LMS transformation. So what are the tech partners we are looking at to have this changed? Would this have different kind of LOS LMS for various kinds of asset classes that we would be working on? The third part is rationalizing the manpower or having a different orientation for the prison manpower.
Deepak Reddy
To hear your voice too. Two, three questions. One on, you know, on the, I mean a lot of your questions, I must say, you know, came a little garbled to us. I hope I’m answering the questions right. One was of course on the strategy which you told us and Subranju, my request is, you know, please, please bear with us for, you know, as we move into FY27, when we’ve shared our, you know, that well thought through strategy. I request you to bear with us on, you know, on our tech architecture. What it is going to be will be premature at this stage because, you know, that’s the journey we have just started with multiple tech partners.
The whole study is going on because we have to take into consideration multiple factors. One is what is the market today? To market the market expected to be in three years, four years. And so we have to build a tech platform not just for today. We have to build a tech platform that is going to last us for the next 10 years. And with the advancements which are happening out here, you know that the, you know, solutions, you know, quite complicated to make. You know, it’s not just plain cookie cutter but we are working, you know, towards that, you know, you know, to put that in place.
You’re working with multiple partners you know, it’s not one partner. Specific to Your question on Los LMS, will different products have different loses LMSs? I think that’s an output of our entire exercise. Then we will know. But all I can assure you is whatever it is, each individual product will have individual workflows customized for themselves. It will not be one standard workflow that we will use for all products. We will have strong loses for different asset classes which are also figurative of how our competitors also use it with a forward looking lens also. And manpower was our next question.
That’s a constant one. You will always have options to optimize. Technology will come in. Can you optimize manpower? All that is yes. But will the absolute manpower come down? Obviously, no. Because if you’re going to talk about our AUM continuing to be 50,000 and then we, you know, then we are, you know, putting in technology and then, you know, people will come down. I don’t think we are looking at, you know, that we are looking at a very, very strong future for the company where our AUM and our growth is going to be multiples of what we are today.
You know, so I don’t think there’s too much to read into in this at the stage it will be steady state, well thought through, well calibrated and we’ll take the long term approach. It will not be a short term approach. It will be a medium to long term approach that we’ll take.
Shubhranshu Mishra
One last question if I can squeeze in. Bain Capital also holds a controlling stake in finance which was Adani Capital. To have that controlling.
operator
Sorry to interrupt so your voice is not audible properly.
Shubhranshu Mishra
So Bain Capital holds a controlling stake in Tiger Capital which was Adani Capital. Is it possible to have that company merged into Banapuram so that they continue to hold controlling stake in that entity? As such,
Deepak Reddy
they are working out already working out some strategy whereby their interest and what assurance as far as is protected.
Shubhranshu Mishra
So it’s open to that question.
Deepak Reddy
Will. Will. We and our chairman rightly said, you know, will, what are the options that they’re looking at? Will it be taken? I think that is completely not our prerogative. That is, that’s a question you should aim, you should probably ask to Bain Capital. I don’t think it is premature and you’ve seen us holding statements on this whole transaction. There are certain questions asked which we’ve given responses to and we are awaiting clarification.
Shubhranshu Mishra
Right. Sure. Thank you so much. Best of luck, Deepak and best of luck the entire team. Thanks.
Deepak Reddy
Thank you.
operator
Thank you the next question is from the line of Prithviraj Patil from Investec. Please go ahead.
Prithviraj Patil
Yeah, thanks for the opportunity. So I had two questions. One, I wanted the option number for the quarter, the gold option number and the second was what is the incremental yield on the gold.
Bindu A.L.
Option is around 32 crore during the quarter. The yield currently stands around 18 percentage.
Prithviraj Patil
Hello.
Bindu A.L.
Auction is around 32 cr during the quarter. Our current yield stands at 18%.
Prithviraj Patil
Hello? Hello.
Bindu A.L.
Can you hear us?
Prithviraj Patil
Yeah, yeah. So I just wanted the option number and the incremental yield on the whole.
Bindu A.L.
The auction is around 32 crore during the quarter and our current yield at 18 percentage on gold loan book.
Prithviraj Patil
Thank you.
operator
Thank you. The next question is from the line of Pratik Kotari from Unique pms. Please go ahead.
Pratik Kothari
Yes. Hi, good evening and thank you. So one on OPEX again. So if we go back 3, 4 years at similar branch productivity of about 10, 11 crores where we are right now, the larger peer Muthut used to be materially lower than where we are. So if you just highlight where is this mismatch? We are in the fives, they were in the threes at similar productivity and I’m going back four years now. So if you just highlight where is that mismatch, what can we do to improve between us?
Deepak Reddy
So Mr. Bhagar, I think, you know, I’ve laid out, you know, the various actions we are taking towards this and as we roll out our strategy, as we, you know, roll out our operating plan for next year also. So I think you’ll have visibility, you know, going back four or five years and comparing with competitors, you know, who did what, who did when. I don’t think we wanted to put this on a call.
Pratik Kothari
No, but you do we, because do we agree there’s a mismatch and we. Want to work on that or this. Is how our business is structured and this stays as it is?
Deepak Reddy
No, we have answered that question right. We have very strong aspirations of growth of the company. And when we lay out a strategy you will see it for us. I mean obviously we are obviously not happy and we will never be happy with where we are. Our whole orientation will be always that we have to do better than what we are, wherever we are, at whatever stage we are. And that’s our orientation. There is a lot of work to do which you are working on and the results will follow. And we’ll share with you the plan as we get into next quarter.
We’ll share the plan with you already. You would have Seen the pub grads from the beginning of the year to this year, we were a little behind. We know why we’re behind. We also explained to our reasons because we also followed a different pricing strategy as one of them. That was one important thing. We have taken those actions and you’ll see we are here to be a dominant player in the market in which we will be.
Pratik Kothari
And this 4.254 and half standalone RO. I mean what timeline did we give for that?
Deepak Reddy
I will go in the second half of next year.
Pratik Kothari
Okay, thank you.
operator
Thank you. The next question is from the line of Bharat Singh, an individual investor. Please go ahead.
Bharat Singh
Hello.
Bindu A.L.
Yes please.
operator
Yes sir.
Bharat Singh
Yes, I have one question. This like in Asirwat Finance there is some impairment losses. We are booking like each quarter we see the losses. So this losses is complete losses or in the later quarter they will be cover up.
Bindu A.L.
So the collection efforts are going on for the NCA book also. But you have seen that in MFI Once it is 90 DPD the collection is very difficult but lot of effort is going on. We are taking the collection agencies also to improve the collection. But as the quality of book is improving we will see reduced credit cost in the coming quarters.
Deepak Reddy
Yes, we should see reduced credit costs and we have taken some impairment this time even on ASA book as a prudent measure. Even though we did have to some small amounts. But. And as I mentioned and outlook is looking strong, sir.
Bharat Singh
Okay, my next question one is like now Ben Capital they. They are acquiring controlling stake in the company. So it will be from the promoter will be shifted to the bank capital. And also when this transaction will happen there will be open offer. But as I read that this open offer will be was price at 236. But now price for the stock is already increased way higher. So when this open offer will come there is chance that Ben Capital will get more stake in the company.
Bindu A.L.
These details are already given. Yeah.
Deepak Reddy
See the promoters are not selling the stock. This is
Bharat Singh
okay.
Deepak Reddy
Yeah. This is entirely primary. Right. So this is already it is told to the market the plan about the plan of 9% equity. Now once the approval is received then 9% through convertible debentures it will be converted into equity in another 18 months. So they will have 18 stake and the present promoters will have more than 28 stake. It will continue. So it will be. It will be a case of join promoters existing promoters along with Bain as a joint promoter.
Bharat Singh
Okay, sir. Thank you.
operator
Thank you as well. Was the last question for the day. I would now hand the conference over to Mr. V.P. nandakumar for closing comments. Over to you, sir.
V.P. Nandakumar
So thank you so much for your active participation as usual. Now this time I hope you could hear more about the new CEO strategy. Also I hope that definitely help you to understand what the company will be in the coming one or two years time. So thank you so much for the questions.
Bindu A.L.
Thank you.
Deepak Reddy
Thank you. Thank you all. Thank you very much. And thank you for your continued support.
operator
Thank you. On behalf of tem Capital Advisors Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect lines. Thank you.