Manappuram Finance Q3FY25: Net Profit Rises 5.8%, NII Up 13.7%; Declares ₹1 Interim Dividend

Manappuram Finance reported a 5.8% YoY rise in Q3FY25 net profit to ₹453.4 crore, with net interest income (NII) growing 13.7% to ₹1,160.9 crore. The company announced a ₹1 interim dividend per share and plans to raise $2 billion via its Global Medium-Term Note (GMTN) program. Despite strong gold loan growth, its stock fell 6.4% post-earnings due to concerns over microfinance unit performance and higher provisions.

CONTENTS:

• Manappuram Finance Q3FY25: Net Profit Rises 5.8%, NII Up 13.7%; Announces ₹1 Interim Dividend
• NBFC Stocks Decline Post Q3 Results; Manappuram, IIFL, Repco, Fusion Drop Up to 6%
• Manappuram Finance Q3 Results: Net Profit Increases 6% to ₹453 Crore, Declares ₹1 Interim Dividend

Manappuram Finance Q3FY25: Net Profit Rises 5.8%, NII Up 13.7%; Declares ₹1 Interim Dividend

Manappuram Finance Q3FY25: Net Profit Rises 5.8%, NII Up 13.7%; Announces ₹1 Interim Dividend

Manappuram Finance reported a 5.8% year-on-year (YoY) increase in net profit for Q3FY25, reaching ₹453.4 crore compared to ₹428.6 crore in the same period last year. The company’s net interest income (NII) grew 13.7% YoY, totaling ₹1,160.9 crore, up from ₹1,021.2 crore in Q3FY24, reflecting strong lending activity and improved interest margins.

Additionally, the company announced plans to raise up to $2 billion through its Global Medium-Term Note (GMTN) program, aimed at enhancing its financial flexibility and expansion opportunities.

Foreign brokerage firm CLSA reiterated its ‘Outperform’ rating on Manappuram Finance and raised its target price to ₹225 per share. It also noted that gold loan growth has remained strong in the first nine months of FY25.

Manappuram Finance declared an interim dividend of ₹1 per share on a face value of ₹2, with a record date set for February 21, 2025, and payment scheduled by March 14, 2025.

Ahead of the earnings announcement, the company’s stock ended higher on the BSE, closing at ₹194.25, marking a 1.33% increase for the day.

NBFC Stocks Decline Post Q3 Results; Manappuram, IIFL, Repco, Fusion Drop Up to 6%

Shares of several non-banking financial companies (NBFCs), including Manappuram Finance, IIFL Finance, Repco Home Finance, and Fusion Microfinance, saw declines of up to 6% following the release of their Q3 results.

Manappuram Finance’s stock fell 6.4% to a low of ₹181.80 on the BSE, while IIFL Finance dropped 2.73% to ₹322.30. Fusion Microfinance declined 3.86% to ₹163, and Repco Home Finance slipped 2.28% to ₹349.15.

Motilal Oswal Financial Services (MOFSL) reported that Manappuram Finance’s consolidated profit after tax (PAT) declined 52% YoY, falling 44% short of its estimates. While net interest income (NII) grew 10% YoY in line with expectations, pre-provision operating profit (PPoP) was flat, missing projections by 9%. MOFSL revised its PAT estimates downward for FY25-FY27 and maintained a ‘Neutral’ rating on the stock, setting a target price of ₹215.

IIFL Finance’s Q3 PAT saw an 85% YoY decline, with NII falling 22% due to lower assignment income and fair value gains. Additionally, the company faced Income Tax (IT) raids across its offices and key personnel’s residences under Section 132, with authorities investigating undisclosed income. Despite these challenges, IIFL’s gold loan portfolio grew 40% quarter-on-quarter, and MOFSL set a target of ₹415 for the stock.

Repco Home Finance reported a 7% YoY increase in PAT, aligning with estimates, while NII grew 9% and exceeded expectations by 5%. However, operating expenses rose 31%, surpassing projections by 12%. MOFSL noted that while valuations appear attractive at 0.5x FY27E P/BV, concerns remain over the company’s ability to scale loan growth. It maintained a target of ₹400 for the stock.

Fusion Microfinance posted a net loss in Q3 due to NIM contraction caused by interest income reversals and the reversal of Deferred Tax Assets (DTA). The company is awaiting SEBI approval for its rights issue, having already secured clearance from BSE and NSE. MOFSL projected an AUM CAGR of 3% and a negative PAT CAGR of 11% over FY24-FY27, reiterating a ‘Neutral’ rating with a revised target of ₹175.

Manappuram Finance Q3 Results: Net Profit Increases 6% to ₹453 Crore, Declares ₹1 Interim Dividend

Manappuram Finance reported a standalone net profit of ₹453.4 crore for Q3FY25, reflecting a 5.8% year-on-year (YoY) growth from ₹428.6 crore in the same period last year.

The company also announced an interim dividend of ₹1 per equity share with a face value of ₹2, setting February 21, 2025, as the record date for determining eligible shareholders.

Net interest income (NII) grew 13.7% YoY to ₹1,160.9 crore, up from ₹1,021.2 crore in Q3FY24, indicating strong lending operations and improved interest margins.

Alongside its financial results, Manappuram Finance disclosed plans to raise up to $2 billion through its Global Medium-Term Note (GMTN) program, aimed at enhancing its financial flexibility and supporting future expansion.

Key Financial Highlights

The Indian microfinance sector has faced rising default rates due to rapid expansion. Manappuram’s microfinance unit saw a four-fold increase in bad loans and provisions, reaching ₹4.73 billion, which contributed significantly to the company’s total provisions of ₹5.55 billion for the quarter.

The Reserve Bank of India (RBI) had previously restricted the unit from issuing loans due to high pricing and excessive mark-ups over funding costs. However, this restriction was lifted last month. As a result, revenue from the microfinance segment declined by approximately 5% to ₹6.65 billion.

Conversely, revenue from the company’s gold loan business, which constitutes 75% of its total revenue, surged 17%, benefiting from record-high gold prices. Higher gold prices allow customers to borrow larger amounts against their holdings, driving growth in the gold loan segment.

Ahead of the earnings announcement, shares of Manappuram Finance closed 1.33% higher at ₹194.25 on the BSE.