MUMBAI: Shares of Manappuram Finance Ltd on Friday surged more than 7% as the firm's total gold loan disbursements during fiscal 2020 rose to ₹1.7 trillion from ₹89,649 crore last year.
The company's profit after tax grew 43% year-on-year (YoY) at ₹392.7 crore in the quarter ended March, compared to ₹274.6 crore in same period last fiscal. Total income rose 38.7% to ₹1618.2 crore in Q4, against ₹1,166.5 crore in the year-ago period.
Consolidated assets under management (AUM) were at Rs. 25,225 crore, up 29.8%, compared to ₹19,438 crore in the previous year. Growth was led by gold loans, which increased by 30.9% to ₹16,967 crore.
"At ₹17000 crore, MGFL’s gold loan AUM increased 31% YoY in the March quarter, continuing its growth streak for the ninth consecutive quarter. This was largely aided by 7% volume growth to nearly 73tonnes and 25% YoY growth in AUM per branch to ₹47 million. It has prudently maintained 59% loan to value on its gold portfolio," said Bank of Baroda Capital Markets Ltd.
Analysts at Phillip Capital said Manappuram Finance’s core gold loan business continued traction was aided by higher gold price. Even during the lockdown, the company managed to disburse gold loan at 70% of the usual run rate from its online platform.
"The stock trades at 1.2 times FY2022 book value with return of asset (RoA) of 5.7% and return on equity (RoE) of 22.5% for FY2022, which is one of the best across NBFCs (non-banking finance companies)," said Phillip Capital, which has a buy rating on the stock.
Besides gold loans, the company’s micro-finance subsidiary, Asirvad Microfinance Ltd, also registered impressive growth closing the year with an AUM of ₹5,503 crore, an increase of 43.3% over ₹3,841 crore reported in the previous fiscal.
The vehicle and equipment finance division's AUM rose by 20.6% to Rs1,344.3 crore in FY20, while the company’s home finance subsidiary contributed ₹630 crore to the total AUM, against ₹519 crore last year. Overall, the non-gold businesses contributed 32.7% to the total portfolio.
“We ended fiscal year 2019-20 on a strong note, recording good growth in business and profitability in the fourth quarter despite the setback towards the end related to the pandemic. Going forward, we feel we are well positioned to tackle the economic fallout of the pandemic and maintain the momentum in this year too," said VP Nandakumar, managing director & chief executive officer (MD & CEO).