{"id":156168,"date":"2023-11-13T10:26:01","date_gmt":"2023-11-13T15:26:01","guid":{"rendered":"https:\/\/44.250.171.167\/?p=156168"},"modified":"2023-11-13T10:26:02","modified_gmt":"2023-11-13T15:26:02","slug":"manappuram-finance-ltd-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/manappuram-finance-ltd-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"Manappuram Finance Ltd Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Manappuram Finance Ltd (MANAPPURAM) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Net profit increased 37% year-on-year to INR551 crore driven by profitability in gold loans and microfinance business.<\/li>\n<li>Gold loan AUM was INR20,809 crore, up 8.4% year-on-year.<\/li>\n<li>Maintained pricing discipline in competitive environment and improved profitability.<\/li>\n<li>Consolidated AUM at INR38,950 crore, up 27% year-on-year.<\/li>\n<li>Consolidated PAT at INR561 crore, up 37% year-on-year<\/li>\n<li>Gold loans comprise 53% of consolidated AUM.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Gold Loan Business and Outlook<\/strong>\n<ul>\n<li>Gold loan AUM at INR20,809 crore, up 8.4% year-on-year.<\/li>\n<li>Added 4.03 lakh new gold loan customers during the quarter. Adding around 5,000 new gold loan customers daily.<\/li>\n<li>Average loan-to-value ratio is 66%.<\/li>\n<li>56% of gold loan book is online.<\/li>\n<li>South India contributes around 65% to gold loan portfolio<\/li>\n<li>Expect to maintain 7-8% gold loan growth momentum without gold price increases.<\/li>\n<li>Expects around 8% gold loan growth in Q3, higher than Q2 growth of 1%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Microfinance Business<\/strong>\n<ul>\n<li>Asirvad Microfinance filed DRHP for IPO on October 5, 2022.<\/li>\n<li>Microfinance AUM at INR10,950 crore, up 43% year-on-year.<\/li>\n<li>Microfinance PAT at INR111 crore versus INR48 crore year-ago.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Other Businesses<\/strong>\n<ul>\n<li>Vehicle finance AUM at INR3,143 crore, up 66.6% year-on-year.<\/li>\n<li>Home loans AUM at INR1,305 crore, up 41% year-on-year.<\/li>\n<li>Loan to MSME and allied businesses AUM at INR2,639 crore.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Loan Assignments<\/strong>\n<ul>\n<li>Assigned loans worth around INR700 crore this quarter for MFI loans.<\/li>\n<li>Assignments not possible for gold loans, but doing for non-gold businesses.<\/li>\n<li>Opened lines of credit to diversify sourcing beyond deposits.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Operating Expenses<\/strong>\n<ul>\n<li>Employee expenses decreased due to lower incentives tied to growth and asset quality.<\/li>\n<li>Administrative expenses increased due to more communication and outsourcing costs.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Gold Loan Competition<\/strong>\n<ul>\n<li>Maintaining pricing discipline around 22% despite competition.<\/li>\n<li>As banks&#8217; overall credit growth increases, preference for small ticket gold loans may decrease.<\/li>\n<li>Expect competition to taper given rising funding costs.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Gold Loan Portfolio<\/strong>\n<ul>\n<li>15% of book less than 1 month old.<\/li>\n<li>Average LTV 66%.<\/li>\n<li>Auctions were INR15 crore in 2Q.<\/li>\n<li>Option surplus reduced from INR35 crore last quarter to INR30 crore now.<\/li>\n<li>Delinquencies higher than MFI loans as grace period is provided to borrowers.<\/li>\n<li>Underlying gold collateral ensures no loss on recovery.<\/li>\n<li>Can sell gold before NPA classification if needed based on contract.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Asirvad Microfinance Growth<\/strong>\n<ul>\n<li>Current capital position sufficient to support growth this year.<\/li>\n<li>Fundraising through IPO for growth capital needs in future.<\/li>\n<li>No expected slowdown in growth momentum.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Funding and Liquidity<\/strong>\n<ul>\n<li>Apprehension from case now resolved with final order.<\/li>\n<li>Have around INR4,800 crore in liquidity now.<\/li>\n<li>Seeing adequate liquidity and some pricing reductions.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Fee and Commission Income<\/strong>\n<ul>\n<li>Stood at INR31 crore in Q2 vs negligible in previous quarters, primarily from referral fees on selling products like appliances to borrowers.<\/li>\n<li>Q2 income higher due to pent up demand in Q1 when disbursements were slow.<\/li>\n<li>Expect run-rate to continue but not as high as Q2 due to one-time benefit.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Business Outlook<\/strong>\n<ul>\n<li>Expect similar growth trends in Q3 as Q2 across gold and non-gold.<\/li>\n<li>Targeting around 10-15% growth for non-gold lending business.<\/li>\n<li>Growth dependent on region specific cycles and market conditions.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Manappuram Finance Ltd (MANAPPURAM) Q2 FY24 Earnings Concall Financial Performance Net profit increased 37% year-on-year to INR551 crore driven by profitability in gold loans and microfinance business. Gold loan AUM was INR20,809 crore, up 8.4% year-on-year. Maintained pricing discipline in competitive environment and improved profitability. Consolidated AUM at INR38,950 crore, up 27% [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,1],"tags":[10169,8265,1792,11691],"class_list":["post-156168","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-finance-stocks","tag-earnings","tag-finance","tag-financial-services","tag-gold-loans"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":129624,"url":"https:\/\/alphastreet.com\/india\/manappuram-finance-ltd-q4-fy22-earnings-conference-call-insights\/","url_meta":{"origin":156168,"position":0},"title":"Manappuram Finance Ltd Q4 FY22 Earnings Conference Call Insights","author":"Praveen","date":"May 19, 2022","format":false,"excerpt":"https:\/\/youtu.be\/zOcVftH8xQo Key highlights from Manappuram Finance Ltd (MANAPPURAM) Q4 FY22 Earnings Concall Q&A Highlights: Dhaval Gada from DSP asked about the pricing pressure in the gold business and the outlook on lending rates in gold loan business. 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