MANAPPURAM Q3 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Manappuram Finance delivered a stable Q3 FY26 performance with consolidated AUM of ₹52,125 crore, up 17.9% YoY, driven by robust gold loan growth of 58.2% YoY to ₹38,754 crore. Consolidated PAT stood at ₹239 crore, declining 14.3% YoY due to elevated credit costs in the microfinance subsidiary Asheraad, which reported a loss of ₹156 crore. The management has pivoted to a disciplined strategy—accelerating the gold loan franchise while consolidating non-gold businesses (MSME, vehicle finance) until systems and controls are strengthened. Asheraad's new book is performing well with 99.78% collection efficiency, and the company expects credit costs to moderate from Q4 onwards. Gold loan yields have normalized to ~18.3% in line with industry peers, with further pressure limited. The pending Bane Capital transaction (in-principle RBI approval received) remains a key catalyst. Key risks include execution risk in non-gold book turnaround, regulatory delays on branch expansion approvals pending the Bane transaction clearance, and margin compression as competition intensifies in gold lending.
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Guidance to track
- Management expects to reach ROA of 4.25-4.5% as volume growth at branches continues, opex remains controlled, and non-gold credit costs decline in the second half of FY27.
- MSME and vehicle loan businesses will see low to moderate growth until systems, processes, and controls are fully strengthened; formal growth to resume from Q1 FY27.
- CEO explicitly committed to sharing a comprehensive strategic plan and specific financial guidance from next financial year (FY27) onwards.
- Management expects gold loan portfolio yields to stabilize in the 18-18.15% range as pricing reaches parity with leading competitors, with transmission from onboarding to book being faster due to the digital gold loan app.
Risks flagged
- GNPA levels in housing finance (~5%), MSME/vehicle finance (~6-14%) are significantly elevated for a gold-focused lender. The analyst explicitly questioned accountability and whether balance sheet surprises remain. Management acknowledged the seriousness by making non-gold consolidation its second strategic priority.
- RBI has not yet approved new branch openings for gold loan business. Management acknowledged this is likely linked to the pending Bane Capital co-promoter transaction, creating a strategic constraint on growth just as gold loan demand is strong.
- Weighted average LTV remains at 57-60%. While management is confident of managing a temporary gold price correction via online gold loan app, any sustained decline could trigger customer repayments and reduce ticket sizes, impacting AUM growth.
- An analyst raised a pointed question on why Manappuram's cost structure is materially higher than larger peers at similar branch productivity levels (~10-11 crores). Management acknowledged the concern but deflected detailed response, promising clarity with the FY27 strategic plan.
Key quotes
- We are already at eight or eight and a half. I would say we are almost there on the journey of getting priced in line with peers. What the takeaway you can take back is from being priced above market, one of them you can expect to price at market going forward.
- In Asheraad, collection efficiency in our new book is at 99.78%... the balance of the old book we are seeing a collection efficiency increase about 2% quarter on quarter, which establishes the fact that we have not let the old book slip away.
- Whatever the RBI has told Bane is ready to go by that. So that will not create any problem with regard to promised investment in Manappuram as well as the joint control in Manappuram.
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