This article first appeared on GuruFocus .
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Consolidated AUM:INR52,125 crore, up 13.8% year-on-year.
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Gold Loan AUM:INR38,754 crore, up 23% year-on-year.
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Consolidated PAT:INR239 crore, up 9.8% year-on-year.
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Standalone AUM:INR44,209 crore, up 60.9% year-on-year.
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Standalone PAT:INR381 crore, up 1.3% year-on-year.
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Microfinance AUM:INR6,091 crore, including gold loan AUM of INR1,610 crore.
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Net NNPA:1.8%.
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Interim Dividend:INR50 for the quarter.
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Warning! GuruFocus has detected 8 Warning Signs with BOM:531213.
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Release Date: January 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Manappuram Finance Ltd ( BOM:531213 ) reported a consolidated AUM of INR52,125 crore, marking a 13.8% year-on-year increase, driven primarily by the expansion in gold loan AUM.
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The company's consolidated gold loan AUM for the quarter was INR38,754 crore, showing a significant 23% year-on-year growth, supported by favorable gold prices and strong customer demand.
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The company has a robust liquidity position with capital adequacy comfortably above regulatory thresholds, providing stability in managing cost of funds.
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Manappuram Finance Ltd ( BOM:531213 ) is making progress on its strategic priorities, including accelerating gold loan growth and improving branch infrastructure.
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The company has declared an interim dividend of INR50 for the quarter, reflecting its commitment to returning value to shareholders.
Negative Points
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The microfinance segment, Asirvad Microfinance, continues to face challenges with elevated credit costs and borrower cash flow issues.
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The company's standalone PAT decreased by 13.9% year-on-year, indicating pressure on profitability.
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Non-gold lending segments, such as vehicle finance and MSME loans, are experiencing asset quality deterioration, with high GNPA levels.
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The company is facing regulatory challenges related to branch expansion approvals, potentially impacting growth plans.
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There is uncertainty surrounding the Bain Capital transaction, with pending regulatory approvals affecting strategic decisions.
Q & A Highlights
Q: How should we think about the gold AUM growth given the current gold prices? A: Bindu A.L., CFO, explained that the AUM growth is driven by a strategy focusing on high-ticket customers with lower yields. The growth in customer numbers is not as significant due to this shift. V.P. Nandakumar, Chairman and MD, added that customer prudence plays a role, as gold is considered auspicious, and the LTVs remain stable. Even if gold prices fall, the impact would be temporary, and the company is well-positioned to manage such scenarios.
Q: What is the outlook on gold loan yields? A: Deepak Reddy, CEO, stated that the yields will align with market rates, which are currently around 18.5% to 18.3%. The company aims to maintain yields similar to other leading players, even as they shift towards larger ticket size customers.
Q: Why has borrowing increased more than loan growth this quarter? A: Deepak Reddy explained that the increase in borrowings is due to interim approvals from the RBI, with final approvals expected soon. The borrowing was necessary to manage liquidity and is expected to stabilize once the approvals are finalized.
Q: Can you elaborate on the price sensitivity tests for improving the scheme mix? A: Deepak Reddy mentioned that the company is conducting tests across geographies and customer segments to align pricing with market conditions. This involves adjusting strategies based on competitive factors and market evolution, aiming to price at market levels.
Q: What are the strategic priorities for non-gold businesses? A: Deepak Reddy highlighted a consolidate-to-growth strategy, focusing on improving credit performance and profitability. The company has scaled down certain businesses and tightened underwriting norms, with plans to resume growth after strengthening systems and processes.
Q: How is the company addressing asset quality issues in non-gold portfolios? A: Bindu A.L. stated that provisions are being made for vehicle finance and MSME loans, with a focus on improving asset quality. The company is conducting valuations and write-offs where necessary, and expects improvement in vehicle finance due to easier asset repossession.
Q: What is the status of the Bain Capital transaction and its impact on branch expansion? A: Deepak Reddy noted that the transaction is in the final stages with the RBI, and approvals for branch expansion are expected soon. The company is optimistic about receiving favorable decisions from the regulator.
Q: How does the company plan to manage operating expenses amid strategic initiatives? A: V.P. Nandakumar mentioned that while there will be capital investments, the initiatives will also lead to optimization of operating expenses. The company expects leverage benefits and improved productivity to offset any increase in costs.
Q: What is the expected trajectory for standalone ROA? A: Bindu A.L. and Deepak Reddy indicated that the company aims to achieve a standalone ROA of 4.25% to 4.5% by the second half of the next fiscal year, driven by growth in branch business and stable borrowing costs.
Q: How is the company addressing the high GNPA levels in non-gold segments? A: Deepak Reddy emphasized that the company has analyzed past issues and is implementing corrective measures across acquisition, underwriting, and risk management processes. Growth in these segments will resume once the systems are strengthened.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
