Manba Finance Ltd (NSE: MANBA) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Manish K. Shah — Managing Director
Jay Mota — Whole Time Director and Chief Financial Officer
Analysts:
Tushar Pendharkar — Analyst
Nemin Doshi — Analyst
Monshree Soni — Analyst
Unidentified Participant
Samarth Lalwani — Analyst
Sudharsan Nachimuthu — Analyst
Shubhranshu — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Manba of Naans Limited Q3 and 9 months FY25 earnings conference call hosted by Venstra Securities 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 and then zero on your touchstone phone. Please note that this conference is being recorded. Before we begin, I would like to point out that this conference call may contain forward looking statements about the company which are based on the belief, opinions and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company and it may involve risk and uncertainties that are difficult to predict. I would now like to hand over the call to Tushar from Venstra securities Limited. Thank you. And over to you Tushar.
Tushar Pendharkar — Analyst
Thank you. Good day. Ladies and gentlemen, on behalf of Insurance Securities Ltd. I welcome you all to Manba Finance Ltd. Q3 and 9 months FY25 earnings conference call. The company is today represented by Mr. Manish Shah, Managing Director Mr. Monil Shya, Executive Director and Chief Business Officer Mr. Jai Motta, Executive Director and Chief Financial Officer of the company. I would now like to hand over the call to Mr. Manish Shah for his opening remarks. Thank you. And over to you sir.
Manish K. Shah — Managing Director
Good afternoon everyone and thank you for joining my BA Finance Limited’s earning call today to discuss third quarter and nine months performance of the financial year 2025. I would also like to thank Ventura securities for for hosting this earning calls in the interest of some of the people who are new to the company. Let me first try first start by giving a brief overview of the company and operational highlights followed by which our CFO will brief you on the financial performance for the quarter and nine months of the financial year 2025. MANMA Finance Limited Is a NBFC offering a range of financial solutions including loans of new two wheelers, three wheelers, used cars, small business loan, top up loan and personal loans. We are currently operating in 71 locations across six states. Our distribution network includes over 1100 dealers out of which almost 180 are EV dealers. We have secured funding from three public sector banks, nine private sector banks and 25 NBFCs. We also have a co lending arrangement with Muthoot Capital Service Limited. We have a total team size of approx. 1474 employees out of which more than 650 employees are a part of sales teams. Our internal collection team ensures lowest NPAs in the industry. The company commands one of the fastest turnaround times for loan sanctions in the industry with over 60% of our loans get sanctioned in one minute time and 92% of the sanction within a day. Some key business highlights for this quarter are Care Rating Ltd. Has revised the credit rating outlook for its debt instrument and bank facilities revising it from BBB Stable to BBB plus positive. Additionally, the Company signed an MOU with Piaggio Vehicle Private Limited to offer customized financing solution for three wheelers contributing to India’s EV transition and supporting entrepreneurship. The collaboration will provide low down payment options, competitive interest rates and simplified digital onboarding process and so far we have received a very good response for the same arrangement. The company also achieved a record high disbursement of 327 crore in the Q3FY25 marking a significant increase from the 253 crore in quarter 3 24. This resulted in strong growth in NII with improvement in NIMS due to usage of equity proceeds from IPO for loan disbursements. With this few brief about the company now I will request our CFO Mr. Jai Muta to brief you on the financial performance.
Jay Mota — Whole Time Director and Chief Financial Officer
Thank you Manish sir and good afternoon everyone. Let me provide a brief overview of the financial performance for the third quarter and. Nine month of the financial year 2025. For the third quarter under review, our net interest income stood at rupees 36.10 crore reflecting a 64% year on year growth with net interest margin of 14.82%. Profit after tax for the quarter was around rupees 13 crore showcasing the growth of one hundred and seventy one percent of on the year on year basis. For the nine month ended financial year 2025, the company recorded net interest income of around rupees 93 crore representing a 54% year on year growth with net Interest margin of 12.94%. Profit after tax stood at INR approximately rupees 30 crore with the year on year growth of 39%. As on 31st December 2024. Our asset under management stands at rupees one thousand three hundred and four crore reflecting a year on year growth of 48%. Loan disbursement for the ninth month of the financial year were at around rupees 672 crore reflecting a year on year Growth of 28%. The cost of borrowing currently stands at 11.52%. We have successfully reduced our NPA to GNPA to 2.83% and net NPA to 2.21%. As on 31st December 2024. Our capital adequacy ratio has improved to 31.37% due to the fund raised in our IPO highlighting the greater financial stability. With this, we can now open the floor for the question and answer session.
Questions and Answers:
Operator
Thank you sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press Star and one on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing Star, Star and one again. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. First question comes from Nimin Doshi from GoJ. Please go ahead.
Nemin Doshi
Yeah. Hi team. Congratulations on a great set of numbers. Firstly sir, I have few questions. Firstly on. On the financial front. If I look at your AUM growth on a sequential basis is about 18%. Whereas the same is not being reflected in your NI NI growth is somewhere about 5% or so. What am I missing here? Since our yields have also improved from a nine month perspective compared to one edge. So can you give some color on the same?
Jay Mota
See the EU and which is increased it was during the period of season period of Diwali. So whatever interest income which we earn it will be start from the this quarter onwards. So that’s why you will see the growth in the NII from this quarter onwards. Because we have disbursed in the month of October and November. So major income we will see a full, full income in the quarter. We will see in the this quarter only.
Nemin Doshi
Okay. Okay, got it. And secondly, as to where are we in terms of market share with dealers, especially in the mature market and what percentage of the market share do we aspire to reach over medium term? The reason I ask this is because will our first area of focus be to capture the incremental market share within the already entered market or to venture out into newer locations as we have been seeing over the last one year that we have been venturing out into different locations.
Manish K. Shah
Yeah. So presently wherever we are there in the market more than three and a half year to four years, we are at a market share of 12 to 14% and that is 14 to 18% is what we. What is our target to reach all the area where we are operating. So as you ask that are we going to focus on the existing area? Yes, because Most of the 50% of the location we have started in last 18 to 24 months and where our market share is in in the range of 2% to 6%. So we are definitely going to focus in next one year at least on the same area. And we will try to reach out to at least minimum 10% of the market share of all the area. Then we will start the other new locations.
Nemin Doshi
Perfect. Perfect. That’s helpful. And lastly, just to get a sense about how is the competition panning especially on the cost front given the fact that banks have an advantage and how are these different from competitors?
Manish K. Shah
As far as different from competitors are concerned, number one is our debt. Our, you know sanctioning debt is the fastest in the industry. Same is the case with the disbursement debt that is also three days. So these are the. Which is a USP of the company. Number two, we are presenting two wheeler loans since more than two decades. Because before the NBFC we were at the DSA for two wheeler loans. Then from last 16 years we are working as an NBFC for all the two wheeler products.
So the continuity, the relationship with the dealers. Now we have entered into second generation. So that is also one of the things which is really helping company. Thirdly we keep lot of engagement activity at the dealership point. So which creates a natural traffic from the dealer. And that is one of the key reason why dealers are preferring Manba as one of the financier at their locations.
Nemin Doshi
Perfect, Perfect. That’s pretty helpful. And last one on the NPA front. How do we expect NPA trend from here on? Especially given the fact that we are venturing out into unsecured products. So should we see the credit cost picking up or how should we just look at from a two year to three year perspective.
Manish K. Shah
So today also my secured funding is 97% and unsecured is only 3%. We are any which way restricting ourselves this financial maximum 5% of the unsecured loans and that will be the. This will be the company will be always remain focused on secured lending. So we. I don’t predict any much, you know difference in the NPA because of the unsecured product. Because the contribution of the unsecured product is not going to be more than 5%. Secondly the small business loan which is an unsecured loan. We are taking utmost care in the credit processes and very very conservative approach for the seed product also.
Nemin Doshi
Perfect, Perfect. Thank you. Thank you a lot Manisha. This is helpful and all the best for future quarters. Thank you.
Manish K. Shah
Thank you.
Operator
Thank you. Next question comes from Monsri Soni from NK Ventures. Please go ahead.
Monshree Soni
Hi. Am I audible?
Operator
Yes ma’am.
Monshree Soni
Initiate. You know that the asset quality has improved year on year. Of course, quarter on quarter. The asset quality has finished up though this is in line with. You know the other financiers could. According to you, what would be the reason for this inch up in asset quality for your business particularly?
Manish K. Shah
Yeah, so basically the, you know we are keeping lot of processes where the collection team keeps on, collection team keeps on giving an input to the credit team and year on year we are increasing the customer equity. Whenever he’s taking the loan that has really helped company for the better NPA because whenever customer has given more down payment and so he’s bound to, you know, honor his commitment towards the EMI. So this is number one. Number two, 92% of our portfolio today is owned house. So that is also one of the reason of better performance on the NPA side. Thirdly we are focusing more up to 150cc segment. So which has been those vehicles which has been used basically for the utility purpose rather than other. So that is also and that is their day to day need to use that vehicle. So that also helped us in, you know, better performance of them.
Operator
I’m sorry to interrupt sir. Yes, your voice is not clear. Sir,
Monshree Soni
Could you please repeat the part that you were focused that you are more focused on what type of rental.
Manish K. Shah
Now I’m audible.
Operator
Yes sir, you’re audible now.
Manish K. Shah
Yeah. So we were talking about the asset quality. So company is always, you know, pushing customer more and more customer equity. So for example we will be focused for 75% funding only rather than going for 85%, 90% funding. So whenever customer equity is more the performance of that loan is always better. Number two, we are completely collection team and the credit team is in sync. Whenever they get any kind of information about any PIN code or any particular area, they keep on giving the input to the credit team. So the credit team takes the right call. Thirdly we are into mainly focus into 150 segment. So those vehicles basically being used for utility purpose and they generally don’t bounce more. Fourthly, 92% of our total portfolio is owned house. Only 8% is rented. So these all are the backdrop. Which has always helped the company for a lower NPA.
Monshree Soni
All right, understood. And could you please. So our AUM guidance for FY25 was around 1250-1350 crore. This quarter we’ve reached almost 1300 crores. So are we revising our guidance upwards?
Manish K. Shah
Yeah, so we have. Because our season performance was we were expecting X and it is not almost 1.5x so we have already been able to reach 1300 crore which we have already, you know, guided. And now this quarter is not much of a festival except Guri Parva which is on the 30th of March, that is the very end of the quarter. So these products are mainly little bit of, you know, focus on a season base. So of course we are, we are focusing, we are diversifying, we are penetrating more in the nude areas. So we are expecting around 1350-1400 crore in the range of same.
Monshree Soni
And could you please give one more breakout of your age? Okay, okay, no worries. I’ll get back.
Operator
Thank you. I request the participants to restrict with two questions in the initial round and join back the queue for more questions. Next question comes from Lokesh Dubey, an individual investor. Please go ahead.
Unidentified Participant
Am I audible?
Manish K. Shah
Yes.
Unidentified Participant
Yes. Hello Manisha. Congratulations on the numbers. I don’t really have a question. It’s more of a suggestion and you know, it is more of a research thing which you might have to do. So I see that we are planning for a web based app for our associates and correspondents. So I wanted to check if we have a plan for a super app type of experience for the end customers rather than just for our associates because it can actually give our customers, existing customers, a lot of much better user experience than the web based websites and a lot of traction in terms of payment reminders, existing loans, referrals to others and notifications.
So basically it gives us free advertising because we sort of live in their phones and that’s the digital thing, you know, which goes on as we are all using our phones on databases. So just wanted to check on that front if we have plans for app for the end customers and a super app because we can always.
Unidentified Participant
Push add on services on top of existing loans like you have mentioned in past. Eligibility for personal loans for existing users. If they are doing well then we can. We do provide personal loans as well. So just wanted to check if we have plans for that or if not it’s probably a suggestion just for the research.
Manish K. Shah
Good input on the immediate base. I will say no because we are in a process of. You know if you see our website, this is more. Most of the functional which you are asking it is available on the website. Number two, we are in a process of a customer scorecard. A very very dynamic customer scorecard software we are making. Once it gets ready then we definitely go for the customer app which will definitely cover all the features which we were. You were giving the inputs. But it will take at least six months to one year time.
Unidentified Participant
Yeah, absolutely. No, no rest on that. Just wanted to check because you know rather than associate if we get in customers hands it gives us a direct contact and you know much better interaction and reachability as well. But thank you. That’s what I want
Manish K. Shah
Because more important because today my top up loan is a 17% conversion on the existing loan and we have now in the booking five products. So this app is definitely. It can really help us in selling the cross sell also. So we have already started the process but it will take six months to one year time.
Unidentified Participant
Sure thing. Yeah. This personal don’ts. You know it could be. I’m just saying for example, you know people a lot of vehicle loans teams send insurances as well. It could be other services as well which can be. Which we can be intermediaries of. Like there are services we don’t have to do that. I’m just giving ideas like you know it could be a good platform to add on your services. But thanks, thank you. Thank you for your answer. Thank you sir.
Manish K. Shah
Okay,
Operator
Thank you. Next question comes from Samad Talwani from LA securities and Stock Broken Private Limited. Please go ahead.
Samarth Lalwani
Hi, thank you so much for taking my question and congrats on another good performance. My question was with a strong capital adequacy ratio at 31.37% Are there any plans to deploy capital more aggressively for growth or maybe for client or dealer acquisitions? And likewise, what are your loan book targets for the next financial year?
Manish K. Shah
Yes, of course, you know we all know that the fuel for NBFC is capital. So as and when the company will require and Europe will definitely raise the fund and because in the coming year, especially this year we would like we will be ending by 1350 or 40. Whereas the next year our range is around 1900 to 2000 crore rupees. And if we go up to 2000 crore also this capital is sufficient. But yes, definitely, as we all know that you know NBSC keeps on requirement the requirement of a capital. So if the, you know, the external situations are good, our numbers are good, we the way we are performing and this will continue will definitely come for the second round in the next year.
Samarth Lalwani
Thank you very much. And my last question would be given the company’s primarily focused on two wheeler financing, are there plans to diversify your portfolio or to expand into any other segments?
Manish K. Shah
Yes. So we have already added four new products, three wheeler used car top up loan as small business loan from 100% of Two Wheeler. Today as of 31st December we are standing at 82% in the Two Wheeler. And within a year’s time we will definitely end at around 75%. So definitely we are focusing the way, we are focusing on the geography expansion, we are focusing on the product diversification also.
Samarth Lalwani
Thank you very much. That’s it from my end.
Operator
Thank you. Next question comes from Sudarshan Nachimutu from Prosperity Wealth Management. Please go ahead. Can you please speak little louder, sir?
Sudharsan Nachimuthu
Yeah. Am I audible?
Operator
Yes. Sir, please.
Manish K. Shah
Yes.
Sudharsan Nachimuthu
So what would be the incremental cost of funds post the rating updates?
Manish K. Shah
Pardon?
Sudharsan Nachimuthu
What is the incremental cost of borrowing?
Manish K. Shah
Yeah. So after the rating updates, what happened? So after I will say not rating but after the listing, we are almost getting a fund at almost 50 to 75 rupees lower than what we were getting before the listing.
Sudharsan Nachimuthu
Okay. Any indication of our cost of boring is coming down post the rating update.
Manish K. Shah
Yeah.
Jay Mota
Sir, can you pardon the question?
Sudharsan Nachimuthu
Post rating upgrade, do we see any indication of cost of borrowings coming down?
Jay Mota
Yes, definitely. So post rating definitely there will be a reduction in the rate of interest. So there will be a reduction of cost of borrowing also. And we are expecting the what we can say rating upgrade in the next year on the basis of March financials. So there will be a definitely reduction in the cost of borrowing.
Sudharsan Nachimuthu
And the next question is sort of a bookkeeping question. So how do we record our co lending transaction in income from core lending?
Jay Mota
So core lending transaction is with Muthoot capital and it is on the 80:20 basis. So 80% is the Muthoot Capital share and 20% is our share.
Sudharsan Nachimuthu
Yeah. So we place the 80% on a steady state, steady percentage. I believe it’s between 12 and 13%.
Manish K. Shah
So can you just repeat the last question?
Sudharsan Nachimuthu
Yeah. So we suppose that 13. Right. We place the advances 13%.
Manish K. Shah
Yeah. Please.
Operator
Your voice is not clear sir.
Sudharsan Nachimuthu
Yeah, I’m audible now.
Operator
Yes, please go ahead.
Sudharsan Nachimuthu
So the 1820 sharing we place the advances at steady 13 to Muthu. Right. This balance spread is for the company.
Manish K. Shah
So now 12% is our arrangement. Okay. With Muthoot on 80% we are getting the balance of what we are lending and then 12% and on 20 we are. Then you get 21 for example. So we are getting 21.
Sudharsan Nachimuthu
Okay, thank you.
Operator
Thank you. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. Next question comes from Jignesh and individual investors. Please go ahead.
Unidentified Participant
Yeah. To understand like you entered new geographies and even expanding your product portfolio. So for next two years you only go for organic growth or if there is a good opportunity to add a good inorganic layer. You would like to consider anything maybe on your drawing board for next three to five years.
Manish K. Shah
Yes. So we definitely we were penetrating in the our own area. We are also finding some good partners who are already there existing and doing well because of the, you know now the capital is adequate and our capital adequacy is also 31%. We are able to raise funded fund also and at a better price also. So that will also help us and to grow our aum. But we are in a discussion with two, three partners and on the right time and with the right merits of the partner will definitely start.
Unidentified Participant
Thank you.
Operator
Thank you. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. The question comes from. We have a follow up question from Sudarshan Nachimutu from Prosperity Wealth Management. Please go ahead.
Sudharsan Nachimuthu
What would be the NIM guidance for the next financial income? Hello? Yep. Yes sir. What would be the NIM guidance for the next financial
Manish K. Shah
Mean guidance? It will be around 13, 14% range. It will be around 13 to 14%.
Sudharsan Nachimuthu
Okay, so and what will be the first loss default guarantee for Muthur Koh lending?
Manish K. Shah
First loss default capital, it’s 2%. Yeah, it’s 2% of total portfolio.
Sudharsan Nachimuthu
And just a follow up question on the co lending part. We do we sold loans at 23% yield, do we pass on the entire yield to the muthu 80% share or do we keep some spread with us?
Manish K. Shah
It’s a co lending arrangement so we are going as per the co lending arrangement only.
Sudharsan Nachimuthu
Okay. Okay, thank you.
Operator
We have a question from the caller. 9,958-631-TRIPLE4. I request you to introduce yourself and ask a question.
Shubhranshu
Hi, this branchy here from Philip Capital. Just wanted to understand the demand at the entry level. What I’ve been given to understand is motorcycles, especially less than 125cc have very tepid demand and the government does also not willing to reduce the GST which is around 28% on the bike which is causing a lack of affordability and not many financiers are also willing to finance these guys because the income is not growing or the income stability is also a problem. So your comments please. Thanks.
Manish K. Shah
So the area where we are operating, you know this kind of situation is may not be there and we are getting. The month on month good response. And the EMI amount is such a small and the kind of saving which they do by using the vehicle, the gap is huge. As far as monetary concern is also there and operational issues also there. So as far as the industry is concerned, it has been growing. This year it’s been growing by 17 to 19% and especially in the area where with the state where we are there, it has been grown by 23%. So 23% growth is a very substantial growth. And we are in almost three states, we are very new also. So there is a huge scope pending. So as far as companies loan product is concerned, two wheeler, three wheeler, we are quite confident that there is a huge space available.
Shubhranshu
So there is no problem at entry level bikes. The CM numbers don’t suggest the same bike.
Manish K. Shah
Yeah,
Shubhranshu
Yeah, but if we look at the CM numbers of less than 125cc motorcycles, they’re not growing. Anything more than 125cc is definitely growing.
Manish K. Shah
No, the what numbers you, what we are discussing is the all India level, number one thing. Number two, the area where we are operating up to 150cc there is a huge growth and it has been growing not only this year, consecutively from last four years, four years it has been growing. So as far as Maharashtra, Gujarat, Rajasthan is concerned, their continuous demand is this for this said vehicle. And we are quite balanced in the urban as well as rural. In urban there is a huge potential and demand is coming up from Last at least 3, 4 months I can say for electric vehicle also. So that is also giving a lot of, you know, room for the expansion.
Shubhranshu
Okay, and what is the demand for Bajaj Freedom bike which is a new concept bike in CNG and what according to you would be the total market for that? And in terms of EVs in two wheelers, why is the demand in semi urban and rural India more than urban India? Is it because that electricity is free for farmers in rural India, hence the demand is more.
Manish K. Shah
So your first question about the Bajaj Bajaj, the product has just started and as far as our NBSC is concerned, we are not focused much on the Bajaj vehicle because it is a Bajaj captive financier. They are very active and very aggressive. We are focused on Honda Hero, Suzuki TVS and Piaget. As far as your second question is concerned about the more acceptability in the semi rural, semi urban area. Of course electricity will play farmer free and that will play one role. But the most important thing is that that lot of campaignings are going in those area for electric vehicle. Lot of, you know, awareness has been created in that area and of course the it is going to be very, very most cheapest mode. So I think that is more acceptability is coming up and they are using mainly vehicle for their utility purpose rather than going for more speed and speed drive. So that’s the reason that is more acceptability overcome.
Shubhranshu
And what are the yield that is charged on the EV two wheelers and what is the average tenure of those loans?
Manish K. Shah
Average tenure is around 24 months and as far as yield is concerned it is 2% lesser than what we are doing for the ICE engine. So we are lending in EV at around 18 to 19%.
Shubhranshu
Understood. Thank you. Those were my questions.
Operator
Thank you. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. We will wait for a moment while the question queue assembles. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. There are no further questions. Now I hand over the floor to Mr. Manish for closing comments.
Manish K. Shah
So thank you all for participating in the earnings call. I hope we have been able to answer your questions satisfactory. If you have any further question or would like to know more about the company, please reach out to our IR managers at Velorum Advisory. And once again, thank you very much. Thank you, Ventura. Thank you, Venoram, for organizing. And thank you, all the participants. Thank you very much.
Operator
Thank you, sir. Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation. You may now disconnect your lines. Thank you and have a good day.