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The Valapad (Thrissur) based Manappuram Finance Ltd (MFL) reported a consolidated net profit of Rs367.97 crore in its first quarter results, an increase of 37.93 per cent over Rs266.78 crore recorded in the same quarter a year ago. Net profit in the quarter for the standalone entity (which excludes subsidiaries) is Rs369.11 crore.
“Consolidated profits have declined by 7.59 per cent in comparison to the preceding quarter (Q4 FY20), reflecting the impact of Covid-19 and the lockdowns. This was a quarter when the overall business environment was severely affected by the lockdowns. However, we were able to maintain growth in our core business of gold loans thanks to our digital infrastructure, particularly our robust online gold loan platform,” explains V.P. Nandakumar, MD and CEO, MFL pointing out that the company’s gold loan portfolio increased by 33.44 per cent to Rs17,736.79 crore, from Rs13,292.41 crore in the year ago quarter. While the aggregate gold loans disbursed during the quarter amounted to Rs68,389.77 crore, new customer acquisition was affected by closure of branches due to lockdowns and stood at 33,000.
“The Q1 FY21 was a mixed bag for MFL wherein the dismal performance by the non-gold loan businesses – commercial vehicle (CV), micro finance (MFI) and housing finance – 30 per cent of asset under management (AUM) was covered-up by improved profitability in the mainstay gold loan business. Earnings in the gold loans business were strong, driven by healthy value-led AUM growth, substantial shift towards online gold loans (63 per cent of book) and sustained cost reduction,” states Rajiv Mehta, analyst at YES Securities targeting a price of Rs225.