Demonetisation seems to have made a dent in the profitability of several micro-finance institutions and Manappuram Finance is no exception.

The net profit of the Kerala-based gold loan company in the second quarter of FY18 has declined to ₹160.37 crore compared to ₹192.40 crore in the corresponding quarter of the previous fiscal.

However, the company witnessed a 3.5 per cent increase in profit in the second quarter compared to the ₹155.01 crore in the preceding quarter of the current fiscal.

VP Nandakumar, MD & CEO, said: “After demonetisation, the company went through three quarters without growth. But now our consolidated AUM has grown by 2.6 per cent over the preceding quarter. The pick-up in the rural economy following good monsoon has brightened the prospects.”

The total consolidated operating income during the quarter stood at ₹830.03 crore against ₹830.74 crore reported in the preceding Q1. The company’s consolidated assets under management (AUM) was ₹13,723 crore, an increase of 2.6 per cent compared to ₹13,380 crore reported in the preceding first quarter. The consolidated AUM was ₹14,490 crore in the year-ago quarter.

The board of directors has approved payment of an interim dividend of ₹0.50 per share of face value ₹2.

The gold loan AUM grew marginally to ₹10,761 crore against ₹10,738 crore reported in the first quarter. Gold loan AUM stood at ₹12,396 crore in the year-ago quarter. The total number of live gold loan customers stands at 21.59 lakh as on September 30.

The long-term credit rating of Manappuram was upgraded by CARE Ratings to AA (stable) during the quarter. This follows earlier credit rating upgrades by CRISIL, ICRA and Brickwork. Consequently, average borrowing cost of the company continued to decline, coming down by a further 59 bps during the quarter to 8.82 per cent.

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