Manappuram Fin. Q1 FY24 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 2
Margin
Category 3
Fundraise
Yes
Order
N/A
Capex
Yes
2 of 4 growth signals are positive.
Full analysisRevenue guidance
Category 2- Gold loan growth expected at 10% to 12% annually, driven by new customer acquisition and higher loan ticket sizes.
- Asirvad Micro Finance business aims for 25% to 30% growth, recovering from recent liquidity-driven slowdown.
- Overall AUM growth guidance is around 30% to 35% for the current year.
- Non-gold verticals targeting 35% to 40% annual growth, especially in vehicle finance, personal loans, and MSME segments, leveraging low current base.
- Focus on increasing customer base with 4.4 lakh new gold loan customers added in recent quarter; tonnage movement correlates inversely with gold price.
- Yield stability expected in Micro Finance (~25%) with growth maintained through service improvements and technology.
- OPEX expected to reduce as a percentage of AUM going forward due to business stabilization.
See what Manappuram Fin. management said on margin guidance — free account, 30 seconds.
Fundraise plans
Yes- Manappuram Finance is exploring various options for raising capital, including for its Microfinance business (Asirvad).
- They have not finalized the mode of fundraising and are considering both IPO and private equity routes for raising growth capital.
- Promoters do not intend to sell their stake in Asirvad but recognize the need to raise external growth capital.
- The company is working on a few transactions of Non-Convertible Debentures (NCDs) as part of debt fundraising.
- There was a recent quarter increase in borrowing cost, largely due to bank loans, with a decrease in NCDs, but efforts are ongoing to raise debt via NCDs again.
- Overall, capital raise discussions are ongoing, but no concrete decisions or timelines have been announced yet.
See what Manappuram Fin. management said on order book — free account, 30 seconds.
Capex plans
Yes- The company is exploring options for raising capital for growth, particularly for its microfinance subsidiary, Asirvad.
- No final decision has been made regarding the mode of capital raise; options include an IPO or private equity infusion.
- The promoters intend to retain their stake in Asirvad and are not looking to sell the business.
- The need for capital arises to support growth initiatives, especially as the business stabilizes and expands.
- Discussions related to capital raise and strategic investment are ongoing, with no conclusive announcements yet.
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Margin guidance
Category 3- Net profit for the quarter was Rs. 498 crore, showing a 77% YoY improvement, driven by gold loan profitability and microfinance turnaround.
- Gold loan AUM steady at Rs. 20,603 crore; standalone AUM grew 12.6% YoY; consolidated AUM increased 20.6% YoY to Rs. 37,086 crore, indicating growth momentum.
- Expected AUM growth for Asirvad Micro Finance is 30-35% for the current year, with stable yields around 25%.
- Gold loan yield expected to be maintained around 21-22%, with cost of borrowing rising slightly but manageable; operating expenses (OPEX) as a percentage of AUM expected to decrease.
- Credit costs expected to stabilize around 2-2.5% of the average AUM with write-offs reducing in coming quarters.
- Overall, management optimistic about sustaining a return on assets (ROA) near 5%, expecting operating earnings and profits to grow aligned with loan book growth and improved efficiency.
Order book
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What Manappuram Fin.'s management said in earlier quarters
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