Shares of Manappuram Finance slipped 11 per cent at Rs 170.45 on the BSE within the intra-day commerce on Wednesday after the corporate reported consolidated revenue after tax (PAT) at Rs 436.90 crore, up 18.7 per cent yr on yr (YoY), however down 8 per cent quarter on quarter (QoQ) for the quarter ended June 2021 (Q1FY22).
The firm missed Street expectations resulting from decrease web curiosity revenue (NII). In Q1FY22, NII was up 13.3 per cent YoY, and down 2.3 per cent QoQ. Meanwhile, provisions had been elevated at Rs 120 crore.
The gold mortgage e-book declined 13 per cent QoQ to Rs 16,500 crore and gold holdings slipped 11 per cent QoQ to 58.1 tonnage. Over the final two quarters, gold holdings have cumulatively declined 15 per cent and gold AUM 18 per cent over this era. In all non-gold segments, the respective mortgage books had been flat sequentially.
The firm stated lockdowns throughout the months of May and June and department closures adversely affected new buyer additions (down by 36 per cent sequentially throughout Q1FY22). This has come again to regular ranges since July / August.
“Due to Covid, many branches were either not functional or only partially functional leading to decline in new customer acquisitions. Borrowers also withdrew collateral due to Covid stress. Proportion of high LTV (loan to value) portfolio (over 80 per cent) has come down to 6 per cent. It has reduced due to better risk management prices of gold declined by 17 per cent from peak leading to some borrowers withdrawing collateral,” the corporate stated.
Analysts at Motilal Oswal Financial Services, nevertheless, say commentary from the gold finance NBFC suggests a robust uptick in demand and new buyer acquisitions in Jul’21, which seems to have sustained in Aug-MTD’21 as properly. “MGFL’s shorter tenure gold mortgage product (three months v/s the trade common of 6–12M) has led to increased auctions and withdrawals from prospects, leading to sustained decline in gold AUM/holdings over the past two quarters,” it stated in a outcome replace.
Although MGFL has traded off progress, we derive nice consolation in its standalone asset high quality (which was flat QoQ), particularly within the context of its >80 per cent LTV mortgage portfolio declining to round 6 per cent in 1QFY22. Over the medium time period, we anticipate MGFL to ship round 15 per cent steady-state gold mortgage progress. Other segments, particularly MFI and Vehicle Finance, would stay reasonably susceptible resulting from COVID, the brokerage agency added.
