Manappuram Finance Limited (MANAPPURAM) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Manapuram Finance Q1-F527 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then 0 on your touchtone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Abhijit Tebriwal from Mutila Loswal Financial Services Limited. Thank you and over to you, sir.

Yeah, thank you, Steve. Good evening, everyone. I am Abhijit Tebriwal from Mutila Loswal and it is our pleasure to welcome you all to this earnings call. Thank you very much for joining us for Manapuram Finance earnings call to discuss the Q1 FY27 earnings. To discuss the company's earnings, I am pleased to welcome Mr. VP Nandakumar, Chairman and MD, Dr. Sumita Nandal, Executive Director, Mr. Bhuvanesh Sarashankar, Group CFO and CFO. Mr. Manoj Prasanga, Co-CEO, Ashirabad Microfinance. Dr. Roy Varghese, Co-CEO, Ashirabad Microfinance. Mr. Amandeep Singh, CFO, Ashirabad Microfinance. Mr. Kamal Parma, Head Vehicle and Equipment Finance. Mr. Rakesh Sharma, Co-CEO, Mannapuram Home Finance. Mr. Suveen P.S., Co-CEO, Mannapuram Home Finance. And Mr. Robin Karugami, CFO, Mannapuram Home Finance. On behalf of Motila Noswal, we thank the Senior Management and the Investor Relations team of Mandapuram Finance for giving us this opportunity to host you today. I now invite Mr. Nandakumar for his opening remarks. With that, over to you, sir.

Thank you. So good evening, everyone, and thank you for joining us for Mandapuram Finance. You won FHG7 Unlisted Investor. It's a pleasure to connect with all of you once again, as we discuss our performance for the first quarter of FI27 and share our perspective on the opportunities and priorities shaping the year ahead. Operating environment. The first part of FI27, because they are resilient operating environment. For the Indian economy, despite persistent geopolitical uncertainties and volatility in global commodity markets, India's macroeconomic fundamentals remain strong, supported by healthy domestic consumption, improving rural demand, sustained infrastructure spending, and a stable financial system. Credit demand across the banking and the NPRC sectors continue to remain healthy, while asset quality across equity lending portfolios remain resilient. Consolidated financial performance overview. Our performance during the quarter reflects the inherent strength of our diversified business model. And the resilience of our core Golan franchise. Consolidated AEM for U1 FI27 was at 69,635 pros, up by 9% U1Q, and up by 57% for U1Y. Consolidated Golan AEM for... Q1 FY27 was at 57,006 crores, which is 82% of all consolidated AEM businesses, 80% for Q4 FY26. Consolidated revenue from operations for the quarter stood at 3033 crores, up by 16% Q on Q, and up by 34% year on year. Profit after tax stood at 585 crores, up by 45% Q on Q, and up by 347 crores. Coming to goal-on business, the goal-on business continues to be our primary growth engine. At the same time, we maintain our disciplined approach towards risk management across all businesses with asset quality, liquidity, and capital preservation continue to remain key priorities. For four decades of experience in security lighting, Monoparance Finance has been one of the country's most trusted gold loan franchise. Stand-alone gold loan AEM 421, FY27, was at 54,655.0, up by 12% upfront profit. And up by 97% year-on-year. As guided earlier quarter, our goal on yield has improved by 59 bits during the start. Coming to microfinance business. Our microfinance business and Rajivar continues to operate in a calibrated manner. Yes, microfinance companies have witnessed industry-wise over the few years. However, the strategic measures implemented over the last several quarters are beginning to deliver encouraging outcomes. Our balance sheet remains of August, supported by Healthy Cafeteria de Cossie. The diversified funding sources and comfortable liquidity buffers. This provides us with flexibility to pursue growth opportunities by maintaining financial resilience in an evolving operating environment. Stands at 7188 cro up by 5.8% Q1Q and up by 7.2% year-on-year. Ashir was asked to report a cut of 21 cro in this quarter, up by 58% Q1Q and up by 108% year-on-year. Coming to housing and MSME lending business. Our housing finance and MSME lending business continue to focus on profitable growth while maintaining strong credit discipline. Rather than pursuing rapid value sheet expansion, we remain committed to building sustainable businesses. That generates Healthy research research returns over the long term. Coming to priorities for one of them, it is remaining unsafe. We continue to strengthen our senior executive team. Mr. Ashish Singh has been appointed as the MD and CEO and expected to join by January 1st of 2027. He is a seasoned banker with over 24 years of experience in the retail banking space and his latest experience at the IDFC first bank as head of retail abilities and previously as leading viral banking business. Going forward, we will continue to maintain our leadership in the goal on business through customer-centric innovation, digital capability, and operational excellence. Simultaneously, we will focus on improving the performance of diversified businesses through disciplined underwriting. Stronger portfolio quality, and sustainable profitability. Technology, governance, and operational efficiency continue to remain important pillars of our strategy, as we build a more agile and future reorganization. While the operating environment will continue to evolve, we believe that institutions with strong governance and disciplined execution Trusted brands and food and responsible will emerge stronger over time for a long time, with our resilient business model, robust capital position, and diversified financial services platform. We are well positioned, capitalized on the significant opportunities ahead. With that, I now sent over a call to our President and Group CEO. Mr. Bhuvanesh Parashankar, we'll take you through the detailed financial and operational performance of the quarter. We'll then be happy to take your questions. Thank you.

Thank you, Mr. Namikmar. Good evening, ladies and gentlemen. Thank you for joining us for a discussion on our financial results for the first quarter ended June 30th, 2026. In Q1 FY27, performance was driven by a strategic focus on gold loan growth, improved gold loan yields, and a greater emphasis on non-gold loan collections and strengthened asset quality. Our consolidated AUM for Q1-FI27 It was at 69,635 crores, up by 9% sequentially and 57% year on year. Goldone continued to be our key growth driver with an AUM of 57,006 crores, up by almost 12% quarter on quarter and by about 98% year on year, supported by strong customer demand. Gold loan business constitutes 82% of the consolidated AUM versus 80% in the prior quarter and 65% a year ago. Consolidated profits after tax before OSCI and minority interest was 5.85 crores for Q1 F527, which sequentially was up 44.5%. Coming to the standalone business. Our standalone AUM for Q1 FY27 was at 60,971 crores, up by 9% sequentially and 70.8% year-on-year. Gold loan AUM in standalone business was 54,655 crores, up 12% quarter-on-quarter and 97.4% year-on-year. It constitutes 90% of our standalone EAM versus 87% in the prior quarter and 77% a year ago. Standalone PAC before OCI was 552 crores, up 47% sequentially and 41% year-on-year. Standalone GNPA was at 1.56% versus 1.8% in prior quarter. And credit cost in standalone entity for the quarter was 1%. The standalone borrowing cost has gone up by about 10 bps in the first quarter of

FY27.

Coming to the gold loan business, during the quarter, we were able to add about 3.2 lakh new customers, and outstanding number of customers was 26.5 lakhs. Our average gold loan LTV was at 65.6%. In Q1 FY27. Online gold loan book accounts for about 86% of the total gold loan book. Coming to microfinance business, Ashirwad AUM stands at 7,188 crores, which includes gold loan AUM of 2,344 crores. Overall, the growth was 5.8% quarter-on-quarter. And 7.2% year on year. Back before OCI was 21 crores in Q1 FY27 versus 13 crores in the prior quarter. And in Q1 FY26, we had a loss of 269 crores. So essentially a swing of 290 crores year on year. Net NPA stands at 1.4%, and Ashirwaj CRR... As of quarter end was at 31%. Coming to vehicle finance business, in the vehicle finance business, we have reported an AUM of 2,562 crores, down 14.3% quarter on quarter and 43% year on year. Focus is now on collections as GNPA continues to be elevated at 13.3% versus 10.4% in prior quarter. Loans to MSME and Allied was at 3,303 crores, with a disbursement of 191 crores, and GNPA was at 5.9% versus 7.1% in the prior quarter. Home loan business had a total book of 1,847 crores, flat QOQ, and down by about 3% year-on-year. The board has declared an interim dividend of one rupee for this quarter. Our capital position is strong, and company is well capitalized with a capital adequacy ratio of 21.29%. The company's consolidated net worth stands at 16,552 crores as of June 30, 2026, and book value per share stood at 176 rupees and 20 percent. We can go now for the Q&A session. Thank you.

Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Sripal Doshi with Aquarius. Please go ahead.

Hi, sir. Thank you for giving me the opportunity. And congrats on a good set of numbers. So, my question was firstly on the recent implementation of our new framework on the NTV side. So, what all changes have we made in terms of product tenure? And have we launched income generating products as well during the quarter? If yes, could you please give us some, you know, could you please throw some light in terms of the interest rate as well as tenure and the underwriting practice that we have in that category?

Thank you.

From the recent RBI circular guideline issued from 1st April onwards, we implemented in the reference period by considering the interest also while calculating that, there is a major change that happened and also the ticket size rate also came in the picture, like up to 2.5 lakh, 2.5 to 5 lakh and above 5 lakh. That is implemented from 1st onwards. And according to the new circular and gate line, and are they given some options or some various different kind of product offering options also given. According to the customer requirement and request and all, some of the products like monthly EMI, monthly interest payment or monthly EMI scheme category products also, we launched as a part of that. There are some acceptance. And some of the customer segment like a business class customer or business segment is there, those who are regularly getting income on their business and related operations. In that also, a small segment of income generating loan also started after this April.

So, sir, how is this income generating loan different from the Venla gold loan that we were doing, consumer gold loan that we were doing, except for the bullet repayment part? So, is there any other difference, you know, apart from, you know, having the option of bullet repayment in consumer loan versus income in the income generating loan, we have the EMI option. Apart from these two, is there any other difference?

So, the income-generating asset, income-generating gold loan is given based on the cash losses, the cash flow. So, we have to format for assessing the cash flow, etc. So, whether it is the EMI product or quarterly EI product based on interest in settlement. It's based on the cash flow. The LTV is also based on that. If it is an equated monthly strategy, the LTV is high. And this gives us an option. Yes, sir. If it is overdue, here we can send the new notices. And the recovery process can start as specified by the request. You had a question on the interest rate?

Yes, sir.

The interest rate on this scheme ranges from 14 to 16 percent.

14 to 16%. Okay. And when you say, you know, income evaluation or cash flow evaluation is must when you're doing income integrating loan. So, we have created, you know, bandwidth there in terms of hiring staff over the last three, six months or how is it?

We have hired staff, and also we have our own people in the cash flow-based products like MSME and Vercelon, etc., who have the capacity or the knowledge of assessing the cash flow of the customer, etc., authentic borrower, etc. So, and the sufficient training has been done at various levels. We started this training much before implementation. We started this training at least three months prior to the implementation on April 1st. So, these schemes are from these indicator rating schemes. We have implemented subsequently only, so we had the time to train our staff for six months. They are adequately trained now.

Go on, sir. Just one follow-up there.

I'm sorry to interrupt. Mr. Shripal, could you please repeat your question? You were not audible.

Yeah, so my question was that even in the income generating loan, we follow the similar LTV norms as we follow in the consumer loans, right?

Now, income generating loan, based on the cash flow, we go up to 85%, if it is some monthly EMI, 85%, and if it is quarterly, the fernising scheme is lesser to that. So, the LTV is higher, but at the same time, I can tell you, the overall average LTV remains at 64%. Even at the, yeah, now it has the, yeah, this is the last week's price. Now, the average TV would have come down further because the price has gone up during the last one week.

Got it. Got it, sir. Got it, sir.

Thank you so much for answering your questions. Good luck.

The next question comes from the line of Rajiv Mehta with ES Securities.

Please go ahead.

Yeah, hi, good evening. Congratulations on good numbers. Sir, firstly, I want to understand this movement of 60 basis points, improvement in the portfolio yield. You know, what drove this? Is it the new products which you introduced under the new regulations? Since your portfolio 10% is generally short, is that helping you in maintaining now the yield at a much better level than, you know, than the earlier products? Or has there been any underlying shift in the customer segment mix, meaning that more high-ticket customers or, you know, has there been a change in the customer mix as well? So, you can just answer and whether... Are we able to maintain the same yield in July, August as when, with the same momentum of business?

Hi, this is Bhuvnesh here. So, the yield movement is largely, I mean, last quarter, I think I gave it to the point that, you know, we had overcorrected in terms of, you know, the pricing that we had, and we were taking some pricing actions to ensure that, you know, we are able to enhance the yield. So in Q1, essentially, we have taken some pricing actions, which are beginning to kind of yield results to us, which is what you see in the Q1 numbers. And we see similar trends, you know, going forward as well. From a pricing perspective, we will probably be in this broad band, you know, around the 18% annual. And basically, that's where we will be. So it's not on account of any shift in terms of, you know, a dispersal mix or any segmentation mix. It's basically a set of actions that we have taken from a pricing perspective to be in line with, you know, our peer group, and we continue to monitor that pretty closely.

And with this, you know, holding on to the ease of around 89%, have we seen the velocity of business in terms of financial growth, customer growth, continuing in July and August as well?

So, Q1, you know, if you look at, you know, the growth in one year back, I think it was, you know, from a tonnage perspective and a customer perspective, it was a bit weak. In fact, on the tonnage side, I think we had gone down last year's first quarter. This first quarter, despite seasonally being slow, we have had a good momentum, and we continue to build on that momentum in July and August as well, both from a customer perspective and from a tonnage perspective as well.

And just one clarification, when you report LTV as of June end at 65.6 and as of March at 57.3, this June LTV will also have, you know, LTV defined as per the RBA's new regulation. Or is it lag-to-lag comparable? It's not including interest.

No, so it is. So to some extent, you know, it will include interest. But in terms of, you know, largely the LTV movement that you see from 57 to 64 is driven by the price of gold. So you see that, you know, the price of gold is dropped by about 8.5%. Consequently, you know, you see a similar movement on the LTV side. So it's more of a denominator effect, I would say.

There is no numerator change. You are saying numerator computation change. It's not there. Yeah. Okay.

Okay, all right, I'll come back in the queue, thank you.

The next question comes from the line of Piran with CLSA. Please go ahead.

Yeah, I can claim power.

Uh, hello, uh, Piran, you're not audible. Can you please speak a bit louder?

Uh, okay. Is it audible now?

Yeah, perfect. Thank you.

Yeah, yeah. No, so just going back on the earlier question, where can LTV settle assuming gold prices are stable here?

So, on an average, this will be like 64, 65, even 66 level only. Like March, March end, 57 came mainly because of the price only. 14,161 was the price. Now, today June, that price is at 12,954. That is why this is coming at 66%. But normally, in this level, if it is continuing 64 to 67 is the average

LTV rise in the normal scenario. Understood. So, LTV should be range bound out here. The average this range will be there.

If price increase there, because it is on the last day price we are calculating according to the calculation. That is what is everywhere following that. Last day is price.

Understood, understood. Secondly, we are seeing a lot of competition, you know, on the ground in cold loads. But you all have done pretty well. Just wanted to understand, conceptually, if competitive intensity remains strong or even rises, what would you prefer, holding on to margins or sacrificing margins for pushing growth?

See, we will maintain a balance. So, currently our pricing is one of the lowest range. In the NBFC industry.

So, with the

market, we cannot be totally away from the market. So, we have to move according to the markets. But, I hope we will be reasonably balanced in that. Okay, okay.

And lastly, just a question for Bindu, if she's there, this net loss on de-recognition of financial instruments of 30 crores, just can you explain what exactly that is? Is that a write-off?

Yes, it's a write-off. We can get back on more specifics on that.

Okay, so it's a loan write-off, basically. Yeah, yeah, yeah. Understood, understood. Okay, yeah, that's it from my end. Thanks and wish you all the best.

Thank you.

Thank you. The next question comes from the line of Prithviraj Patil with Investec. Please go ahead.

Hi, thanks for the opportunity. I just had one question of the new

guidelines that are there, different guidelines about the Xperl facility.

So, I just wanted to know, is there any such facility in our online world? Can you repeat the question?

Yeah, so there's a new draft guide, new draft guide guidelines on the revolving

facility, so I just wanted to know if there's any such facility of the online course for the right level.

So, online gold loan does not come under the oversight. It is a normal loan only. It has been lettered in the regular inspection.

Okay, so how does the functioning of this load work once the principle is run down, if the customer is run

down, here's the facility if the LTV permits, here's the facility in the online go along to re-plug that LTV he wants within the range permissible, that's all. It is not an oversight. He has the facility to re-pledge at the prevailing LTV. Within that prevailing LTV, he has the option.

Thank you.

Mr. Prithinath, is that a question?

Yes, thank you. Okay, thank you. The next question comes from the line of Bhaskar Basu with Jeffries. Please go ahead.

Good evening. I had three questions. Firstly, on the LTVs again, how are the origination LTVs? And do you have any loan which originated at around 85% of the LTV for the new loans?

So, first of all, I can say we are working within the regulations. If consumption is 2.5 lakhs, there is a regulation similarly, beyond that also that there are certain caps. The interest also is factored while calculating that. Correct. So, for income generating assets, we go up to... 85%, this is the maximum, 85%. And these are EMI products or EIA products. So here, even though we have the gold collateral with us, most precious given to us is cash flow. These are all for the business people, yes, who will even otherwise qualify for. EMI products based on the cash flow, based on whatever security is the leather instance of ours.

But that income-generated product, actually, my understanding is there is no required LTV cap for that, right? I mean, you can...

Yeah, there is no, as for the regulation, there is no LTV cap. But internally, we have fixed the cap to be 85%, maximum. That's the maximum.

Got it. And what portion of your book will be, say, originated at 75% to 85% band, and what proportion would be the income generating loan?

That data can be shared separately. Yeah, we have to take that aspect data.

Okay. And any – what would be your branch expansion plans for this year? Any acceleration expected?

Now, one good news for us is the requirement of prior approval from RBA has been removed. This facilitates the opening of the branches. So, we have the plan to open around 500 branches now. We are at stream now, already progressing in that stream.

Sorry, 500 branches for this year?

Yes, that is what is planned.

And would this all be in standalone, or would this also include Ashiva?

No, this is for Manapuram. For other businesses like Hopinance or MFI, they have their own plans. No, I mean basically the gold loan branches. Yes, yes, yes.

So, Ashirwad, Golden Branch expansion will be on top of this, or this is part of the 500 for the group?

Yeah, yeah. All these, Manapuna finance and Ashirwad, all these will come under this 500. Yeah, this is the plan.

Okay, got it. And on the cost of... Sorry, please. Yeah, yeah, got it, got it. And my last question is on the cost of fund. We've seen about 20 bids increase in standalone. Where do you see this settling? Does it go up further in the next quarter?

So, Bhuvnesh here. So, in terms of cost of fund, you know, given the overall environment, where we have seen, you know, spikes in terms of the rates in the short wind, we've seen a spike in the rates, we've seen, you know, by far also, you know, all-time high levels. So, despite that, you know, first quarter, we've been able to manage, you know, from a cost of fund perspective, we've been able to keep it fairly under control. We continue to monitor and see in terms of opportunities that will arise in the future, and we'll work on that. It's very difficult to put a number in terms of where this will settle in. But having seen that these are elevated currently, we could expect some of this coming into our cost of fund as well. But it's very difficult to, you know, predict where this will be.

Okay, but some sense on where your marginal funding cost is versus the average of about 8.8? Incremental basis.

On an incremental basis, I would say, you know, we will be around the 8.8, 9 handle is what I would look at.

Okay. Thank you. That's all from my side.

Thank you. The next question comes from the line of Kushan Bareik with Morgan Stanley. Please go ahead.

Thank you for taking my questions. My first set of questions is on the gold loan piece. Going forward, I mean, we have the branch addition plan for gold loans, but gold prices have been pretty muted in this year. Keeping that in mind, what is the gold loan growth guidance that you would like to give for FY27? And also on the yields. So we have seen yields declining consistently, but this quarter they have come back up. What is the steady state gold loan yield that we should think about going forward from here on? Those are my two questions on the gold loan.

We expect the yield to be somewhere around 18%. Go down by 25 basis points or go up by 25 basis points. Beyond that, we don't expect anything. So it will be around 18%. And the branch expansion plan and the price remains stagnant. The price is not a factor which is determining branch expansion. Branch expansion, the scope is there because... There are many places where we are not represented and we have potential overgrowth. Those places are selected, identified and selected for the branch of it.

I understood, sir, but what is the goal on growth guidance that you would like to give for FI27?

We have grown around 12%, nearly 12% at Q1. We expect, our expectation for growth of gold on this year is around 30%, because some quarters are the seasons, some quarters are off seasons. So we expect that to be somewhere between 25% to 30%.

Understood, sir. Thanks, sir. Just one more question on the non-gold businesses. The vehicle finance, MSME, and home loan businesses have been in a growth moderation phase for a few quarters now. When should we expect them to turn towards growth and what are our plans for growth segments?

So, we have temporarily stopped the vehicle lending, vehicle finance, and we are focusing on collection. So, our collections are improving because the improved focus, etc. The other businesses like mortgage, mortgage-based loans, etc. Yes, it has started picking up, and the asset quality is the more focused. Microfinance also, yeah, our focus is on the quality. Yes, we are complying with the SRO norms, etc. And, yeah, the growth will remain at a level of, I feel like, 400 to 500 pros dispersal in my MFI.

Understood. Thank you, sir. Just one last data-keeping question. If you could provide the gold loans by ticket size, that would be helpful. Yeah, I'll just stop.

Up to 1 lakh, it is 21 percentage. 1 to 3 lakh, it is 30. For both 3 lakh, it is 49 percent.

Thank you, sir.

Thank you.

The next question comes from the line of Gora with Capital Farming Consultants. Please go ahead.

Yeah, hi. Thanks for the opportunity. I have questions on two, one on the gold loan segment and another one on the microfinance. On the gold loan, if I heard correctly, we are expecting to open 500. new branches during FY27. Is that the correct statement? Yes. Yes. Okay. Whenever this is going through the presentation, I noticed that I think in Q1, we have added 10 branches, if I'm not wrong. So considering that 10 branches in Q1, is the remaining 490 branches across three quarters, is it operationally feasible or am I reading something wrong? Yep.

The circular has come. After the circular, removing the prior approval requirement, we initiated the process. So then during the initial months, it will be low, but it will pick up, it is steadily picking up. You will see a good improvement during the second quarter. And we are confident of making that offset of 500 branches hold on branches.

Okay, that's great. So, 500 branches is a feasible number, fresh branches. That's great. On the microfinance side, when we look at the quarter-on-quarter numbers, right, Q4 of F526 versus Q1 of F527. I hope I'm audible, right? So, it seems that, again, losses and provisions have increased, right, in Q1 of FY27 versus Q4 of FY26. So, any specific reason why, again, the provisions have increased in microfinance, or I would say, Ashir, what microfinance?

So, Bhubanesh, here, so, in Q4, there were one-timers in terms of releases. I think Q1 is more representative of a normalized provision cycle. So, this would be, you know, where the provisions are. Q4 had a one-timer. Obviously, it was in single digits, I think, 9 crores or something. There were some one-off, you know, credits that we had, which is why the Q1 is a more normalized number that you'll see.

That's great. And within microfinance, or I would say Ashirwar, the cost of borrowing seems to be on a little bit on a higher side vis-a-vis the cost of borrowing that we have in Manapuram as a standalone entity. And now considering that the kind of loan book, or I would say the asset side that we have, that is drastically changed. Now we have almost 30% plus in the gold loan in Ashirwar microfinance side. So, is there any opportunity that we can further negotiate with our lenders or there is a scope of reduction in cost of borrowing considering our lending profile in Ashirwad now onwards?

Yeah, certainly there is a window of opportunity, and you rightly pointed out when we have over 30% of our books in this secure goal loan, it gives us definitely an opportunity to go back to our lenders and negotiate prices for a better cost of borrowing, which we are actively in play.

If you allow me one more question, in presentation, you have mentioned that in K1, you have started lending in Manapuram Housing Finance also, right? So is it a pure play like it will be sitting on the books of Manapuram Housing Finance or it is again kind of a co-lending model like you have between Manapuram Finance and Ashirwar Microfinance? And what would be the target of having the gold loan book in Manapuram Housing Finance going forward?

So it will certainly be

within the limit of qualifying assets here. Qualifying assets will always be maintained.

Will it be kind of a co-lending model or you will be underwriting on the books of Manapur and Housing Finance only?

We will resort to co-lending model also, not only with the parent company, but with the banks also. We have approached the banks also in Manapur and Hopi Lans also for co-lending with the banks.

Thanks, Anastam. Thank you.

Thank you.

The next question comes from the line of Anut Jain with ValueQuest Capital. Please go ahead.

Hi, sir. Thanks for the opportunity. I have one question. What is a new management long-term strategy with respect to microfinance business? Do we intend to grow its share of the portfolio like it was a few years earlier, or to maintain at the current levels, or do we have any strategy or any thinking to reduce the exposure going forward? So, what is the long-term strategy for microfinance business?

Sir, I will tell at the group level, we want to contain microfinance. And we want to grow that along with the overall growth, but it is a stable manner where the asset quality is the prime concern. So we stick to the asset quality and we always wanted to have a prudent growth in the MFI portfolio.

Thank you.

Thank you. The next question comes from the line of Anshuman Deeb with ICICI Securities. Please go ahead.

Yeah, hi. Good evening, and thanks for the opportunity. I have two questions. One is on the branch opening. So I think, you know, in the past we have seen branches has been one of the big levers of volume growth. So, with 500 branches, And if you can share some color on in terms of where these branches will open and any view on branches opening possibility in the next one, two years, that will be the first question. The second is on the strategic priority, which was set like two, three quarters back. If you can give us any progress that has been done till now, I'm sure there would have been lots of work which has done, but some discussion around that would be very helpful.

So, the branch opening, we have assessed where the growth possibility is higher. So, I can say, yes, around 60% will be in South and Central India. That is five states of South India plus Maharsha. And some, say, 22% would be in eastern states like Bihar, West Bengal, Odisha, etc., where we have seen good potential, and the balance in the rest of India.

And, sir, on anything beyond that 500, is it a one-two-year thing? You expect more branches to continue to occur?

Yeah, yeah. So, our present target is around 500 branches, and after that, we'll examine and proceed.

Thanks. And on the second question.

My question was on the strategic priorities. I think we have set some priorities, and you already mentioned that MFI business being less than 10%.

I am very happy to say that our focus will be more on Golo. So we want to maintain around 75% to 80%. of the consolidated AEM in gold. And the balance would be, yeah, the fine thrust would be secured lending, like the mortgage-based MSME lending plus affordable housing. This is the case. We are not giving any priority during this year. We don't want to disperse any more particular loans during this year. After one year, probably in FI 28, etc., we may consider whether to restart or not. So, as I said, the microfinance will be contained between 8% to 10%. That will be the cap on a consolidated basis we will put.

And, sir, on the, like, OPEX, you know, efficiency, you also had some, I think, digital, you know, OPEX, will we expect, like, some efficiency on those front?

Surely, because our AEM per branch is growing. It has grown considerably high. So, you can see the OPEX also, OPEX to AEM is also steadily coming down. We hope to improve that going forward.

Great, sir. Thank you. Thank you so much.

Thank you. The next question comes from the line of Prateep Agarwal with 361 Capital. Please go ahead.

Yeah, hi, sir. Congratulations on both sides of the numbers. So, I have a couple of questions. One, you know, as we have seen, the golden market has evolved many fold over the last four or five years. Have you seen any change or drastic change in the customer profile? So, like earlier, we used to come at that about one-third business used to come for emergency use, one-third for agri and one-third for business. So, are you seeing any change in that end-use proportion? Because, you know, what we have seen is the proportion of higher ticket size customers have increased significantly, not only for us, but for the industry as a whole. So, first question on that, yeah.

Earlier, this was seen as a distressed product. Now, with the publicity given by all institutions including banks. More and more business people, particularly MSM, they are availing the loan. And the government's intention and also regulators' intention is to encourage the MSM lending using gold as collateral. Otherwise, the gold is lying idle with them in their offices, etc., etc. To bring that idle gold into the MSM funding is a priority of the policymakers. Good morning, everyone. So, based on this arrangement, that's why the RBI has gone a little liberal in permitting the gold-owned companies to open more branches without any prior approval, which was the case earlier, etc., and also promoting income generating gold-owned, whereby there is no LTV, even though we have capped at 85% based on cash flow, etc., etc., So, all these initiatives are from the regulatory side. Yes, so it is more of the curve, the profile of the customer is moving to the business class.

Does it mean that you have about 49% of the proportion into more than 3 left ticket size? So, what would be the yield difference between, say, in that segment, say, above 3 lakh ticket size customers and, say, in 1 to 3 lakh ticket size? Because I'm assuming that, you know, this higher 3 lakh plus ticket size would be largely business use, right?

So, the yield will be, so, the mix remains more or less the same. Okay, but consider the mix only, we expect the yield to be around 18%.

Okay, okay, okay.

We know the trend, yeah, we have the mix also. With the whole mix also, yeah, this is the expectation of, yeah, at least during the next one year.

Secondly, you know, as the competition has increased manifold, are we facing any challenges on the employee side? Has the acquisition increased or how that has moved over the last, say, two, three years? Some color on that.

So, we have not faced any challenge in the recent times. Actually, the aggression has come down. Because many policy changes we made, etc., the aggression has actually come down. We have not seen any aggression at the top level who are handling all of us.

Okay, any number you would like to give at the branch level, you know, what is your attrition?

Our attrition level remains around 22.5% per month. Yeah, and it is not crossing even now.

Okay, okay. And lastly, you know, any guidance you would like to give, you know, in terms of ROA and ROE, where do you see, you know, once our business stabilizes in terms of, since on the yield side, it has largely stabilized, so where do you see your ROA and ROE stabilizing in the course of next few years?

We are targeting ROA from 3.5% to 4%. And targeting an ROE of 15 to 18 percent, this is the ROE target. Okay, okay, okay.

And any time frame you would like to give, you know, how, by when you...

Yeah, we expect the ROAs and ROEs to consistently grow. And in three years, our expectation is to take that to ROE 2, I don't know, it is the fact. Okay, okay, okay.

Good to hear that. That's it for myself. Thank you so much, and best of luck for the next quarter.

Thank you. The next question comes from the line of Sripal Doshi with Aquarius. Please go ahead.

Hi, sir. Thank you for giving me the opportunity again. Sir, I just had a question that what is the yield differential at blended level for income generating loans and for the consumer gold loan?

The income generating loan is 50 to 75 bits higher in income generating loan.

Okay, okay, so it's higher versus the consumer loan, right, or the income generating loan is 50 to 75 bits.

Yeah.

And then as a thought process, like what percentage of our portfolio would we want to have this coming from income-generating loan as a segment that's in the next one-year time period, as that is the newer segment just scaling up?

So all depends on the comfort we are getting. We are continuously watching this portfolio. So from here now, whatever we have done, the experience is very good. So, in spite of that, we have not gone beyond 80%. We have seen some lending institutions lending even more than that. We have restricted to that. So, the LTV there also ranges from 75 to 85. Based on the assessment of the Part C and the cash flow, it's credit worthiness, everything, just like any other loan, which are granted based on the cash flow.

Okay, but sir, as a quote, so, okay, we don't have any clear corpuses in terms of the mix.

Yeah, because these products have just started. So, we are continuously watching. Our experience remains very good. Yeah, and so, we are not still fixed at anything, so, because the portfolio is still very small compared to the overall portfolio.

Got it. Got it. Okay, sir. Thank you so much for answering your question, sir.

Thank you. The next question comes from the line of Sankey Cheda with Dam Capital. Please go ahead.

Yeah, it has found some good set of numbers. I just wanted to check on the new CEO, if you can just... I wanted to elaborate on which all segments he has looked after in the last 10 to 15 years or the 10 years of string tight IDFC bank. We have just written legal liabilities, but what we found common or suitable experience in the candidate that could really help us. So just wanted to get a sense on which all segments he has looked after in his previous strengths.

He has wide experience, 25 years with multiple lending institutions. He has both worked on the liability side as well as retail lending side. His experience is good. He has worked in Fullerton, India, the NBFC. He has worked in the other NBFCs and banks. His experience in retail lending is good.

Thank you.

Thank you.

Ladies and gentlemen, that was the last question for today. I now have a conference over to the management for their closing comments.

Thank you so much. You have asked many relevant questions. We try to research the data we have. And those 100 more details, we can remain in touch with us. Thank you.

Thank you, sir. On behalf of Manapuram Finance and Motilalo's fault, that concludes this conference. Thank you for joining us, and you may now disconnect. Thank you.