Event Participants
Executives
11
Amandeep Singh, Bindu A.L., Buvanesh Tharashankar, Kamal Parmar, Manoj Pasangha, Rakesh Sharma, Robin Karuvely, Roy Varghese, Sumitha Nandan, Suveen P.S., V.P. Nandakumar
Analysts
12
Abhijit Tibrewal, Ansuman Deb, Anuj Jain, Bhaskar Basu, Gaurav, Kushan Parikh, Piran Engineer, Pradeep Agrawal, Prithviraj Patil, Rajiv Mehta, Sanket Chheda, Shreepal Doshi
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated AUM | ₹69,635 crores | Up 9% QoQ and 57% YoY; gold loan growth the primary engine — gold now 82% of AUM vs 80% in Q4 FY26 and 65% a year ago |
| Gold loan AUM (consolidated) | ₹57,006 crores | Up 12% QoQ, ~98% YoY; 3.2 lakh new customers added during quarter, 26.5 lakh total customers; online gold book 86% of total |
| Standalone AUM | ₹60,971 crores | Up 9% QoQ, 70.8% YoY; gold loans constitute 90% of standalone book vs 87% prior quarter |
| Asirvad (MFI) AUM | ₹7,188 crores | Up 5.8% QoQ, 7.2% YoY; includes gold loan AUM of ₹2,344 crores (~33% of Asirvad book); calibrated growth posture |
| Vehicle Finance AUM | ₹2,562 crores | Down 14.3% QoQ and 43% YoY; disbursements paused for FY27, focus on collections |
| MSME & Allied AUM | ₹3,303 crores | Disbursements of ₹191 crores; GNPA improved to 5.9% from 7.1% QoQ |
| Home Loan book | ₹1,847 crores | Flat QoQ, down ~3% YoY; co-lending model being developed with parent and banks |
| Consolidated Revenue | ₹3,033 crores | Up 16% QoQ, 34% YoY |
| Consolidated PAT | ₹585 crores | Up 45% QoQ, 342% YoY; strong operating leverage from gold loan scale |
| Standalone PAT | ₹552 crores | Up 47% QoQ, 41% YoY; gold loan yield improved 59 bps in Q1 on pricing actions |
| Standalone GNPA / Credit cost | 1.56% / 1.0% | GNPA improved from 1.8% in Q4 FY26; credit cost steady at 1% |
| Gold loan yield | ~18% band | Improved 59 bps in Q1; management expects yield to hold within ±25 bps of 18% |
| Average gold loan LTV | 65.6% | vs 57.3% in March; increase driven by ~8.5% gold price decline (denominator effect), not numerator change; 64–67% is normal range |
| Asirvad PAT / NNPA / CRAR | ₹21 crores / 1.4% / 31% | PAT swing of ₹290 crores YoY from -₹269 crore loss in Q1 FY26; NNPA flat at 1.4% |
| Consolidated CRAR | 21.29% | Net worth ₹16,552 crores; book value per share ₹176.20 |
| Interim dividend | ₹1 per share | Declared for the quarter |
Geographic & Segment Commentary
Gold Loan: Primary growth engine — consolidated gold AUM up ~98% YoY to ₹57,006 crores. Yield improved 59 bps in Q1 on pricing actions taken last quarter; expected to stay within ~18% ±25 bps. Average LTV at 65.6% (64–67% normal range), with ticket size mix of 21% up to ₹1 lakh, 30% ₹1–3 lakhs, and 49% above ₹3 lakhs — reflecting an evolving customer profile shifting toward business/MSME borrowers. New RBI framework implemented from April 1 (interest factored into LTV, ticket tiers introduced), and income-generating gold loans launched at 14–16% interest with an internal cap of 85% LTV.
Microfinance (Asirvad): AUM at ₹7,188 crores (+5.8% QoQ, +7.2% YoY), including ₹2,344 crores of gold loans within Asirvad. PAT swung to ₹21 crores from a -₹269 crore loss in Q1 FY26. NNPA steady at 1.4%, CRAR at 31%. Management aims to contain MFI at below 10% of consolidated AUM; the secured gold loan mix (~33% of book) creates an opportunity to negotiate improved borrowing costs with lenders.
Vehicle Finance: AUM down 14.3% QoQ and 43% YoY to ₹2,562 crores. GNPA elevated at 13.3% vs 10.4% prior quarter. No new disbursements planned for FY27; focus on collections. Restart under consideration for FY28.
MSME & Allied: AUM of ₹3,303 crores with ₹191 crores disbursed in the quarter; GNPA improved to 5.9% from 7.1% QoQ. Profitable growth with strong credit discipline prioritized over rapid balance sheet expansion.
Home Finance (Manappuram Home Finance): Book at ₹1,847 crores, flat QoQ, down ~3% YoY. Building co-lending relationships with parent company and external banks; focus on maintaining qualifying asset thresholds.
Geographic Expansion: Of the planned ~500 new gold loan branches for FY27, ~60% will be in South and Central India (five southern states plus Maharashtra), ~21% in Eastern states (Bihar, West Bengal, Odisha), with the balance across rest of India.
Company-Specific & Strategic Commentary
Branch Expansion: RBI's removal of prior-approval requirements for branch openings enables ~500 new gold loan branches in FY27. Q1 saw only 10 openings as processes were being established; ramp-up accelerating through Q2 onward. AUM per branch is growing, driving OpEx/AUM ratio down steadily.
RBI Framework Implementation: New LTV framework effective April 1 — interest now factored into LTV calculations, ticket size tiers introduced (up to ₹2.5 lakhs, ₹2.5–5 lakhs, above ₹5 lakhs). New products launched including monthly EMI and monthly interest payment schemes; income-generating gold loans (14–16%) based on cash-flow assessment with no regulatory LTV cap — internally capped at 85%. Staff trained 3+ months ahead of implementation.
New CEO Appointment: Mr. Ashish Singh appointed MD & CEO, expected to join January 1, 2027. 25+ years of experience including Head of Retail Liabilities at IDFC First Bank and prior stints at Fullerton India and other NBFCs/banks. Strengthening senior leadership is a stated priority.
Strategic Portfolio Mix: Gold loan to remain at 75–80% of consolidated AUM; microfinance contained at 8–10% cap; vehicle finance paused for FY27 with possible FY28 restart; focus on secured lending (mortgage-backed MSME, affordable housing). Customer profile evolution observed — gold loan shifting from distress product to business/MSME financing, supported by regulator intent to channel idle gold into formal lending.
Asirvad Cost Optimization: With over 30% of Asirvad's book now in secured gold loans, management is actively negotiating better borrowing costs with lenders — a clear window of opportunity flagged on the call.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Gold loan growth | 25–30% for FY27 | Q1 grew ~12%; seasonal pattern across quarters; branch expansion a key driver; growth not dependent on gold price movements |
| Gold loan yield | ~18% ±25 bps | Pricing actions anchor the yield; no material mix shift expected; maintained through disciplined pricing relative to peers |
| Branch additions | ~500 in FY27 | Ramp-up picking up after initial 10 openings in Q1; no RBI prior approval needed; geographic distribution of ~60% South/Central, ~21% East |
| ROA / ROE targets | 3.5–4% / 15–18% | Three-year horizon to reach ~18% ROE; improving asset mix and OpEx efficiency |
| Vehicle finance | Paused for FY27 | Restart to be evaluated in FY28; collections and asset quality normalization first |
| MFI growth | Contained below 10% of consolidated AUM | Disbursement pace of ₹400–500 crores/month; asset quality the prime concern; calibrated, prudent growth |
| Cost of funds | No specific guidance | Incremental borrowing cost ~8.89% currently; elevated market rates and MIFOR at all-time highs could push blended cost up; difficult to predict settlement level |
| Dividend | ₹1 per share interim | Board declared for Q1 FY27 |
Risks & Constraints
| Risk | Context |
|---|---|
| Vehicle finance asset quality | GNPA worsened to 13.3% from 10.4% QoQ; book shrinking 43% YoY; disbursements paused for FY27 — full impact of collection efforts yet to play out; restart contingent on FY28 normalization |
| Cost of funds pressure | Borrowing cost up 10 bps in Q1; market rates elevated with MIFOR at all-time highs; incremental cost at ~8.89% could push blended cost higher, squeezing spreads if gold loan yields cannot be maintained |
| Gold price volatility | Gold price declined ~8.5% during the quarter, pushing average LTV from 57.3% to 65.6%; LTV calculation is on last-day price — further swings could pressure capital buffers or growth capacity |
| MFI sector stress | Industry-wide stress persists; Q1 FY27 provisions normalized vs one-off credits in Q4 FY26; continued calibrated operation with MFI capped at below 10% of consolidated AUM |
| Competitive intensity in gold loans | Increased competition from banks and NBFCs on the ground; management balancing yield (~18%) against growth (25–30% target); pricing currently among the lowest in the NBFC industry |
| Attrition / talent risk | Branch-level attrition at 2–2.5% per month (not accelerating); management notes attrition has actually declined after policy changes — no top-level attrition concerns |
Q&A Highlights
RBI LTV Framework & Income-Generating Loans
- Question: What changes were made to products, tenure, and underwriting since the new framework, and how do income-generating loans differ from consumer gold loans? (Shreepal Doshi, Equirus)
- Answer: Interest now factored into LTV calculations; ticket size tiers implemented (up to ₹2.5 lakhs, ₹2.5–5 lakhs, above ₹5 lakhs); new monthly EMI and monthly interest payment products launched. Income-generating loans are based on cash-flow assessment with formats for evaluation; interest rates range from 14% to 16%; LTV goes up to 85% for EMI products (internal cap), with quarterly repayment products at a lesser LTV. Staff trained at least three months before implementation, with additional hiring from MSME and vehicle loan teams. (V.P. Nandakumar)
Yield Improvement Drivers
- Question: What drove the 59–60 bps improvement in portfolio yield — new products, customer mix shift, or something else? Can it be sustained in July/August? (Rajiv Mehta, YES Securities)
- Answer: Yield improvement is from pricing actions taken in the previous quarter, not from disbursal or segmentation mix changes; the company had "overcorrected" on pricing earlier. Yield should stay in the ~18% band going forward. Business momentum (tonnage and customer growth) has continued through July and August, building on a strong Q1 despite seasonality — Q1 FY26 had seen tonnage decline. (Buvanesh Tharashankar; V.P. Nandakumar)
LTV & Competitive Positioning
- Question: Where can LTV settle if gold prices stabilize, and how should we interpret competition on the ground? (Piran Engineer, CLSA)
- Answer: LTV at 64–67% is the normal range; March's 57.3% was purely a gold price effect (₹14,161/gram in March vs ₹12,954/gram on June 30 — an 8.5% drop). No numerator computation change. On competition, management will maintain balance — pricing is currently among the lowest in the NBFC industry, and the approach is to stay aligned with the market without giving up discipline. (V.P. Nandakumar; Unidentified Speaker)
Branch Expansion Feasibility
- Question: Q1 saw only 10 branch additions against a 500 target — is the pace operationally feasible? (Gaurav, Capital Farming Consultants)
- Answer: The process was initiated after RBI's circular removed prior approvals; initial months are naturally slow but ramp-up is "steadily picking up," with good improvement expected in Q2. Management is confident of reaching ~500 gold loan branches (including Asirvad's gold loan branches). (V.P. Nandakumar)
Cost of Funds Outlook
- Question: Where does the cost of funds settle — does it go up further next quarter? (Bhaskar Basu, Jefferies)
- Answer: Q1 cost of funds was kept fairly under control despite elevated rates and MIFOR at all-time highs. Incremental borrowing cost is around 8.89%; some pressure may come into blended cost of funds, but it is difficult to predict the settlement level. (Buvanesh Tharashankar)
MSME & Vehicle Finance Strategy
- Question: When will non-gold businesses return to growth? (Kushan Parikh, Morgan Stanley)
- Answer: Vehicle finance is temporarily halted with a collection focus; a restart decision is deferred to FY28. Mortgage-based MSME and home finance are picking up with asset quality as the primary criterion; MFI continues with a quality-first approach at ₹400–500 crores of monthly disbursements. (V.P. Nandakumar)
MFI Provisions & Strategy
- Question: Why did Asirvad's provisions rise QoQ, and what is the long-term MFI strategy? (Gaurav; Anuj Jain, ValueQuest Capital)
- Answer: Q4 FY26 had one-time credit releases (
₹9 crores); Q1 FY27 reflects the normalized provision cycle. At the group level, MFI is to be contained below 10% of consolidated AUM with asset quality as the prime concern; gold loans within Asirvad (33% of book) create a window to negotiate better borrowing costs. (Buvanesh Tharashankar; Unidentified Speaker)
Customer Profile Evolution
- Question: Has the customer end-use profile changed as gold loans mature as a product category? (Pradeep Agrawal, 360 ONE Capital)
- Answer: Gold loans are transitioning from a "distress product" to a mainstream business/MSME financing tool, aided by regulatory intent to convert idle gold into productive credit. RBI's liberalized branch approval regime and promotion of income-generating gold loans support this shift. Attrition at branch level is ~2–2.5% per month and has actually declined after recent policy changes — no talent challenges at top levels. (V.P. Nandakumar)
ROA/ROE Targets
- Question: Where do ROA and ROE stabilize over the next few years? (Pradeep Agrawal)
- Answer: Targeting ROA of 3.5–4% and ROE of 15–18%, reaching ~18% ROE within three years; consistent improvement expected as mix and operating leverage improve. (V.P. Nandakumar)
New CEO Appointment
- Question: What specific experience does Ashish Singh bring, especially from his IDFC First Bank stint? (Sanket Chheda, DAM Capital)
- Answer: 25+ years of experience across liability side and retail lending; has worked at Fullerton India (NBFC), other NBFCs, and banks; his most recent role was Head of Retail Liabilities at IDFC First Bank. (V.P. Nandakumar)
Key Takeaway
In Q1 FY27, Manappuram Finance delivered strong results with consolidated AUM up 57% YoY to ₹69,635 crores, driven by gold loan growth of ~98% YoY, lifting gold's share to 82% of consolidated AUM. Consolidated PAT surged 342% YoY to ₹585 crores, with standalone GNPA improving to 1.56% and credit cost stable at 1%. Gold loan yields improved 59 bps to an expected ~18% band on pricing actions. Management guided 25–30% gold loan growth for FY27, underpinned by ~500 branch additions following RBI's removal of prior-approval requirements, with ~60% of new branches in South/Central India. Asirvad swung to a ₹21 crore PAT from a -₹269 crore loss a year earlier, with NNPA at 1.4%; the MFI book is to be contained below 10% of consolidated AUM. Vehicle finance disbursements remain paused for FY27 with GNPA elevated at 13.3%. Cost of funds rose 10 bps with rates and MIFOR elevated. Management targets ROA of 3.5–4% and ROE of 15–18% within three years. New MD & CEO Ashish Singh joins on January 1, 2027. Key watch points: funding cost trajectory, vehicle finance asset quality, and execution of the aggressive branch expansion plan.