CEO V.P. Nandakumar expects Manappuram’s gold loan business to witness a 10 percent tonnage growth in 2019-20. (Photographer: Dhiraj Singh/Bloomberg)

Microfinance Business Boosts Manappuram’s March Quarter Profit

Manappuram Finance Ltd.’s profit for the quarter-ended March rose by more than 43.3 percent year-on-year, boosted by performance in its microfinance subsidiary.

The company maintained yields in Q4 and passed on the benefits of higher cost to borrowers, its Managing Director and Chief Executive Officer V.P. Nandakumar told BloombergQuint in an interview. Net interest income grew 16.6 percent over last year.

Nandakumar said he expects Manappuram’s gold loan business to witness a 10 percent tonnage growth in financial year 2019-20.

Non-bank lenders were hurt by a cash crunch triggered by the Infrastructure Leasing & Financial Services Ltd. crisis last year, resulting in increased borrowing costs in the last seven months. Gold loan companies, however, remained immune to the trend.

Manappuram has been expanding its operations all over India, and expects to be continuing to do the same at the same speed, Nandakumar said. Its board also approved to explore entry into micro insurance space and acquire 100 percent stake in Manappuram Asset Finance Ltd.

Q4 Results Highlights (YoY):

  • Net interest income rose 16.6 percent to Rs 697.9 crore.
  • Net profit jumps 43.3 percent to Rs 256.9 crore.
  • Net interest margin slips 30 basis points to 15.7 percent.
  • Loan growth in microfinance institutions, housing and commercial vehicle segments were 58 percent, 38 percent and 78 percent, respectively.

Also read: Are Manappuram, Muthoot The New Safe Havens Among NBFCs?

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