The net profit of Manappuram Finance Ltd fell 48 per cent to Rs 84.38 crore in the third quarter ended December 31, 2012, from Rs 161.37 crore in the corresponding period of the previous year.
Operating income fell to Rs 586.20 crore, against Rs 721.37 crore in the similar year-ago period. The PBT (profit before tax) stood at Rs 124.57 crore (Rs 239.54 crore), while provision for income-tax was Rs 40.19 crores (Rs 78.17 crore).
On Thursday, the Manappuram Finance stock crashed 8.3 per cent to close as Rs 39.1, even as it recovered from the day’s low of Rs 37.
According to V. P. Nandakumar, Managing Director and CEO, the company’s high loan-to-value-led growth faced stress on account of the realignment necessitated by regulatory changes.
“However, we are confident that with the positive report of the K. U. B. Rao Committee, and renewed willingness on the part of the banking sector, mutual funds and institutional investors to fund gold loans, the outlook from now on would be positive,” he added.
The company attributes the decline in profits to the fall in yield following the realignment of the lending rates in line with lower LTV norms. Moreover, the company has introduced lower yielding gold loan products to restart growth in disbursements.
On a sequential basis, the company registered a marginal fall of 3 per cent in its gold loans AUM (assets under management) to Rs 10,378 crore against Rs 10,665 crore in the second quarter.
However, aggregate gold loans disbursed during the quarter amounted to Rs 5,702 crore, a growth of 11 per cent over the Rs 5,148 crore disbursed during the second quarter.
With emphasis on recovery, the net NPAs (non-performing assets) have come down to 0.77 per cent from 0.86 per cent in the second quarter.