Manappuram Finance shares decline 14.5% amid lower-than-expected Q1 results – check details here

The shares of Manappuram Finance slumped by over 14.5 per cent and were trading at Rs 163.35 per share on the BSE intraday trade on Wednesday as the company missed street’s expectations due to lower net interest income (NII) in the first quarter of the financial year 2021-22 (April-June). 

The company reported consolidated profit after tax (PAT) at Rs 436.90 crore, up 18.7 per cent year on year (YoY), but down 8 per cent quarter on quarter (QoQ) in June-ended quarter of FY22. 

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The finance company’s NII grew over 13 per cent year-on-year, and down 2.3 per cent on quarter-on-quarter, while provisions were elevated at Rs 120 crore.

The company said lockdowns during the months of May and June and branch closures adversely affected new customer additions (down by 36 per cent sequentially during Q1FY22). This has come back to normal levels since July and August.

The company also said in its results filing that the gold loan book declined 13 per cent QoQ to Rs 16,500 crore and gold holdings slipped 11 per cent QoQ to 58.1 tonnage. Over the last two quarters, gold holdings have cumulatively declined 15 per cent and gold AUM 18 per cent over this period. 

"Due to Covid, many branches were either not functional or only partially functional leading to decline in new customer acquisitions. Borrowers also withdrew collateral due to Covid stress. Proportion of high LTV (loan to value) portfolio (over 80 per cent) has come down to 6 per cent. It has reduced due to better risk management prices of gold declined by 17 per cent from peak leading to some borrowers withdrawing collateral," the company said.

The stock at around 12:10 pm was trading near day’s low at Rs 166 per share, down over 13 per cent on the BSE, as compared to 0.6 per cent fall in the S&P BSE Sensex. This week alone the stock has slumped 18.5 per cent from Rs 200 per share so far.