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Expect growth in AUM Q3 onwards; aim to reduce gross NPAs in FY18: Magma Fincorp

From the third quarter onwards AUMs will grow and that will drive top-line growth going ahead, said Sanjay Chamria, MD, Magma Fincorp.

November 10, 2017 / 12:57 PM IST

Asset financing company Magma Fincorp Ltd today posted an 8.5 percent quarter-on-quarter rise in net profit to Rs 49 crore in July-September.

The company's net interest margin stood at a "healthy" 8.4 percent in the three months ended September on the back of third consecutive quarter reduction in absolute net NPAs, and in the cost of borrowings, a Magma Fincorp release said.

Sanjay Chamria, MD, Magma Fincorp said for three consecutive quarters their net NPAs declined in absolute amount and so despite the marginal decline in net asset  under management (AUM), the net NPA as percentage has gone down to 5.6 percent.

The company has also been increasing provision coverage in order to migrate to 90 days past due basis (dpd) as per the RBI guidelines.

As earlier stated the de-growth in AUM was to last till second quarter, so now from third quarter onwards AUMs will grow. So, growth in AUMs will drive topline growth going ahead, said Chamria.

The company aim to reduce gross NPAs by Rs 200 crore in absolute amount for FY18 versus FY17, said Chamria. In mortgage portfolio there are no NPAs of more than one year, he added.

Disbursement in Q2 also grew quarter on quarter, he said, adding that they would look to disburse Rs 500 crore per month going forward.

As of now, 61 percent of their branches have superior asset quality, he said.

The company is now in a comfortable zone to arrest the asset quality, said Chamria.

first published: Nov 10, 2017 12:55 pm