Manba Finance · risk themes across the available quarters.
Bear-case history
Company's cost of funds at 11% makes it difficult to compete effectively in used four-wheeler financing where market rates are around 16%. Management acknowledged this challenge and is seeking co-lending partners to overcome the structural disadvantage.
Management admitted to collection challenges with EV three-wheeler passenger vehicles from local manufacturers, citing quality issues after one year of usage. This could impact asset quality in the 3.05% three-wheeler portfolio going forward.
Analyst questioned whether 24% PCR is sufficient given industry averages of 40-60%. Management acknowledged the gap but attributed lower provisions to historically sub-1% credit losses. Plans to increase PCR to 25-26% this quarter with profitability support.
Company borrowed ₹410 crore in September (for October-November seasonal demand) resulting in higher finance costs in Q3 (₹42 crore) vs. Q2 (₹34 crore) despite lower average borrowings. This creates quarterly volatility in reported profitability that could confuse investors.