Manapuram Finance’s operating results for the fourth quarter of 2023 were below expectations as the increased tenure of its gold loan portfolio resulted in lower penalty income, impacting yields on that portfolio.
Performance was better than expected for all other parameters, including AUM growth and asset quality. Growth in the gold portfolio has rebounded due to higher gold prices. The non-gold portfolio also grew strongly by 55% year-on-year, led by microfinance, commercial vehicles, mortgages and micro and small businesses.
The Microfinance Institutions business (26% of assets under management) made a significant contribution to AUM by +40% YoY (+15% QoQ) and improved asset quality (2.7% vs. 6.7% in Q3 FY2011). %), contributing significantly to improved profitability (Rs.993 million vs. Rs.993 million). 706 million in Q2 2023).
Manapuram Finance has a compound annual growth rate of 22% for assets under management and is expected to grow at a CAGR of 25% in earnings from FY23 to FY25E.
Manapuram Finance will increase return on assets/return on equity from 4.1%/16.6% in FY2011 to 4.3%/19.3% respectively by FY2025E through optimal product mix, improvement in asset quality and expansion of MFI business It can be improved.
Regarding the recent raid on the General Directorate of Enforcement’s premises, management commented that it had obtained an order to stop ambulance services and hoped the incident would be quelled soon.
Key risk: Any negative developments in the ED case could impact a company’s ability to borrow.
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Systematix Manappuram Finance – Q4 2023 Results Review.pdf
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