Moneycontrol PRO
HomeNewsBusinessEarningsManappuram Finance posts surprise Q2 net profit growth on gold loan boost

Manappuram Finance posts surprise Q2 net profit growth on gold loan boost

Revenue from the company's gold loan portfolio rose about 21% to Rs 1,856 crore, contributing about 70% of overall revenue

November 05, 2024 / 17:12 IST
Manappuram Finance posts surprise Q2 profit growth on gold loan boost

Manappuram Finance posts surprise Q2 profit growth on gold loan boost

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Manappuram Finance reported an unexpected growth in second-quarter profit on November 5, as strong performance in its mainstay gold loan segment offset higher provisions.

The gold loan financier's consolidated net profit rose 2% from last year to Rs 571 crore for the three months ended September 30.

Analysts were expecting a profit of Rs 531 crore as per data compiled by LSEG, a decline of 4.8%.

Domestic gold prices surged to record highs during the quarter, driving loan growth for lenders including Manappuram Finance.

Rising prices of bullion benefit gold financiers as they increase the value of collateral gold, and as more customers seek loans against higher-valued assets.

Revenue from the company's gold loan portfolio rose about 21% to Rs 1,856 crore, contributing about 70% of overall revenue.

Meanwhile, microfinance loans, or collateral-free loans to borrowers with annual incomes up to Rs 3 lakh, jumped 22.6% to Rs 781 crore. The segment contributes 29.6% of revenue.

The company's consolidated assets under management rose 17.4% to Rs 45,700 crore, and its net interest income also jumped about 17.4%.

This offset a 117.5% growth in provisions for bad loans to Rs 260 crore. Impairments in its Asirvad Micro Finance unit jumped by 121.8%, the company said in an earnings statement.

Lenders like IndusInd Bank and Kotak Mahindra Bank have flagged concerns in the microfinance space which has led to higher provisions, hurting their quarterly earnings.

In October, the Reserve Bank of India barred Asirvad Micro Finance from sanctioning and disbursing loans due to "usurious" pricing and for charging a significant mark-up over funding costs.

Shares of Manappuram Finance closed 4% higher ahead of the results.

Reuters
first published: Nov 5, 2024 05:12 pm

Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Subscribe to Tech Newsletters

  • On Saturdays

    Find the best of Al News in one place, specially curated for you every weekend.

  • Daily-Weekdays

    Stay on top of the latest tech trends and biggest startup news.

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347