Manappuram Finance (NSE:MANAPPURAM) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Manappuram Finance Q1 FY 'twenty seven 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. Please note this conference is being recorded. I now hand the conference over to mister from Financial Services Limited. Thank you and over to you sir. Yeah. Thank you, Steve. Good evening everyone. I'm from and it is our pleasure to welcome you all to this earnings call. Thank you very much for joining us for Manappuram Finance earnings call to discuss the Q one FY twenty seven earnings.

0:51 To discuss the company's earnings, I am pleased to welcome Mr. VP Chairman in MD, doctor executive director, mister group CFO and CFO, mister Manoj Fasanra, co CEO microfinance, doctor co CEO, Microfinance. Mister CFO, Microfinance. Mister, vehicle and equipment finance. Mister Co CEO, Manappuram Home Finance. Mr. Co CEO, Manappuram Home Finance. And Mr. Robin CFO, Manappuram Home Finance. On behalf of we thank the senior management and the investor relations team of Manappuram Finance for giving us this opportunity to host you today. I now invite Mr. Nandukumar for his opening remarks. With that, over to you, sir.

1:47 Thank you. So good evening, everyone, and thank you for joining us for MANAPPURAM Finance. It's a pleasure to connect with all of you once again as we discuss our performance for the first quarter of FY 'twenty seven and share our good fortune on the opportunities and priorities shaping the year ahead. Operating environment. The first quarter of FY twenty seven, it was a resilient operating environment for the Indian economy despite persistent and geopolitical uncertainties and volatility in global commodity markets.

2:41 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 POC sectors continue to remain healthy, while asset quality across secured lending portfolios remained resilient. Consolidated financial performance over you. Our performance during the quarter reflects the inherent strength of our diversified business model and the resilience of our core go on franchise.

3:31 Consolidated AEM for Q1 FY 'twenty seven was at 69,635 crores, up by 9% q o q and up by 57% for UNY. Consolidated goal on AM for u one f y twenty seven was at 57,000 crore and 6 crore... 37 and... Thousand 6 crore, which is 82% of all consolidated AUM versus 80% for Q4 FY 'twenty six.

4:19 Consolidated revenue from operations for the quarter stood at 3,033 crores, up by 16% q on q and up by 34% year on year. Profit after tax, student, 585 gross, up by 45% year on year, and up by 347, 2%. I mean, to hold on business. The hold 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 and liquidity and capital preservation continue to remain key priorities.

5:20 With over four decades of experience in secured lending, Manappuram Finance has been one of the country's most trusted gold on Sundays. Standalone gold long AM for Q1 FY twenty seven was at 54,658, up by 12% upfront profit and up by 97% year on year. As guided earlier quarter, our goal on yield has improved by 59 bps during the quarter, coming to microfinance business.

6:08 Our microfinance business, and continues to operate in a calibrated manner. As microfinance companies have have witnessed industry wise industry wise plus over the few years, Our strategic measures implemented over the last several quarters are beginning to deliver encouraging outcomes. Our balance sheet remains robust, supported by healthy capital adequacy, a diversified funding sources and comfortable liquidity buffers. And this provides us with flexibility to pursue growth opportunities by maintaining financial resilience in an evolving operating environment.

7:08 As you know, the EM stands at 7,188 crore, up by 5.8% Q on Q and up by 7.2% year on year. Ashura has reported a cut of 21 crores in this quarter, up by 58 percent Q on Q and up by 8% year on year. Coming to housing and the Amazonian lending business. Our housing finance and the Amazonian lending business continue to focus on profitable growth while maintaining strong credit discipline.

7:57 Rather than pursuing rapid balance sheet expansion, we remain committed to building sustainable businesses that generate healthy risk adjusted returns over the long term. Coming to priorities for Manappuram, it is remaining unchanged. We continue to strengthen our senior executive team. Mister Ashish Singh has been appointed as the MD and CEO and expected to join by 01/01/2027. He's a seasoned banker with over twenty four years of experience in the retail banking space and his latest experience at the ADFC...

8:53 ADFC was banned as set of retail liabilities and previously as leading banking business. Going forward, we continue to maintain our leadership in the full on business through customer centric innovation, the 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 ready organization.

9:51 While the operating environment will continue to evolve, we believe that institutions with strong governance and disciplined execution, trusted brands and prudent respondents will emerge stronger overall for the long With our resilient business model, robust capital position, and diversified financial services platform, they are well positioned capitalize on the significant opportunities ahead. With that, I now hand over the call to our president and group CFO, mister. We'll take you through the detailed financial and operational performance for the quarter.

10:40 We'll then be happy to take follow-up take your questions. Thank you. Thank you, Mr. Manappuram. Good evening, ladies and gentlemen. Thank you for joining us for a discussion on our financial results for the first quarter ended 06/30/2026. In Q1 FY twenty twenty seven, performance was driven by a strategic focus on gold loan growth, improved gold loan yields through a greater emphasis on non collections and strengthened asset quality. Our consolidated AUM for Q1 FY twenty twenty seven was at 69,635 crores, up by 9% sequentially and 57% year on year.

11:33 Goal on 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 OCI and minority interest was $5.85 crores for Q1 FY twenty twenty seven, which sequentially was up 44.5%. Coming to the stand alone business, our stand alone AUM for Q1 FY twenty twenty seven was at INR 60,971 crores, up by 9% sequentially and 70.8% year on year.

12:34 Gold loan AUM in stand alone business was INR 54,655 crores, up 12% quarter on quarter and 97.4% year on year. It consumes 90% of our stand alone AUM versus 87% in the prior quarter and 77% a year ago. Stand alone PAT before OCI was INR $5.52 crores, up 47% sequentially and 41% year on year. Stand alone GNPA was at 1.56% versus 1.8% in prior quarter and credit cost in standalone entity for the quarter was 1%.

13:20 The standalone borrowing cost has gone by about 10 bps in the first quarter of FY twenty twenty seven. 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 FY twenty twenty seven. Online gold loan book accounts for about 86% of the total gold loan book. Coming to Microfinance business. Ashirwad AUM stands at INR $7,001.88 crores, which includes gold loan AUM of 2,344 crores.

14:07 Overall, the growth was 5.8% quarter on quarter and 7.2% year on year. Act before OCI was INR 21 crores in Q1 FY twenty twenty seven versus INR 13 crores in the prior quarter. And in Q1 FY twenty twenty six, we had a loss of INR $2.69 crores. So essentially a swing of INR $2.90 crores year on year. Net NPA stands at 1.4% and Ashirwad's CRER as of quarter end was at 31%. Coming to Vehicle Finance business. In the Vehicle Finance business, we have reported an AUM of INR 2,005 and 62 crores, down 14.3% quarter on quarter and 43% year on year.

14:58 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 INR 3,303 crores with a disbursement of INR 191 crores and GNPA was at 5.9% versus 7.1% in the prior quarter. Home loan business had a total book of crores, flat Q o Q and down by about 3% year on year. The Board has declared an interim dividend of INR1 for this quarter. Our capital position is strong and company is well capitalized with a capital adequacy ratio of 21.29%.

15:48 The company's consolidated net worth stands at 16,552 crores as of 06/30/2026, and book value per share stood at INR 176.25. We can go now for the Q and A session. Thank you. Thank you, sir. We will now begin the question and answer session. You would press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

16:50 First question comes from the line of Shri Pal Doshi with Equities. Congrats on a good set of numbers. So my question was, firstly, on the recent implementation of our new framework on the LTV side. So what all changes have you made in terms of product tenure? And have we launched income generating products as well during the quarter? If yes, what could you please give us some 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.

17:41 On the recent RBA circular deadline issued from April 1 onwards, we implemented in across in the reference period by considering the interest also for calculating that. There is a major change happened and also the ticket sales rate also came in the picture, like up to 2.5, 2.52 for 5 lakh and above 5 lakh. That is implemented from first onwards. And according to the new circular and and they given some options for some various different kind of product offering options also given. According to the customer requirement and request and all, some other products like monthly EMI monthly investor payment or monthly EMI category products also. We launched as a part of that. There are some acceptance from the customer also requesting sir. Now we got that option.

18:39 So we roll the changes done and some of the customer segment like business class customer or business segment is there those who are regularly getting income on the their business and related operations. In that also a small segment of income generating loan also started after this April. So, how is this income generating loan different from the vendor goal loan that we were doing consumer goal 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?

19:31 So the income generating asset, the income generating loan, yeah, is given based on the cash flow, the cash flow. So we have the format for assessing the the cash flow, etcetera. So whether it is the EMI product or quarterly product is based on the cash flow. The LTV is also based on that. If it is an equated monthly installment, the LTV is high. And this gives us an option. Yes. If it is the overview, here we can send the new notices, and the recording process can start as specified by the.

20:24 You had a question on the interest rate. Sir. The interest rate on the scheme ranges from 14% to 16%. 14% to 16%. Okay. And Got it. Got it, Got it. And sir, when you say income evaluation or cash flow evaluation is lost when you're doing income generating loan. So we have created bandwidth there in terms of hiring staff over the last three, six months or how is it? Well, we have hired staff, and also we have our own people in the the cash flow based products like Amazon and with loan, etcetera.

21:24 We have the capacity or the knowledge of processing the the cash flow, the customer, etcetera, and bidding moreover, etcetera. So... And the sufficient training has been done and so at various levels. We started this training much before implementation. We started this training at least three months prior to the implementation on April 1. So these schemes are from... These incantuating schemes were implemented subsequently only. So we added the time to train our staff for six months. They are adequately trained to know. Got it, sir. Just just one follow-up there. Sorry to interrupt. Mister, could you please repeat your question? You are not audible.

22:23 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? No. Income generating loan based on the cash flow, we will go up to 85% if it is some monthly EMI, 85%. And if it is totally, the some is in scheme and lesser to that. So, yeah, the the the LTV is higher. But at the same time, I can tell you is the overall average LTV remains at 64%. Even if the... Yeah. Now it does... Yep. This this is the last week's price.

23:08 Now the average LTV would have come down further because the price has gone up during the last one week. Got it. Got it, Got it, sir. Thank you so much for answering your questions. Good luck. The next question comes from the line of Rajiv Mehta with US Securities. Congratulations on good numbers. Sir, firstly, I want to understand this movement of 60 basis points improvement in the portfolio yield. What drove this? Is it the new products which you introduced under the new regulations? Since your portfolio is generally short, is that helping you in maintaining now the yield at a much better level than the earlier products?

24:02 Or has there been any underlying shift in the customer segment mix, meaning that more high ticket customers or has there been any change in the customer mix as well? So if you can just answer and whether are we able to maintain the same yield in July, August as well with the same momentum of business? Hi. This is Bhubanesh here. So the yield movement is is largely... I mean, last quarter, I think I alluded to the point that we had over corrected in terms of the pricing that we had. And we were taking some pricing actions to ensure that we are able to enhance the yield. So in Q1, essentially we had taken some pricing actions, which are beginning to kind of yield results to us, which is what you see in the Q1 numbers.

25:01 And we see similar trends going forward as well. From a pricing perspective, we will probably be in this broadband around the 18% handle. 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 our peer group and we continue to monitor that pretty closely. And with this holding on to the ease of around 89%, have you seen the velocity of business in terms of tenant growth, customer growth continuing in July and August as well?

25:53 So Q1, if you look at the growth in one year back, I think it was from a tonnage perspective and customer perspective, it was a bit weak. In fact, on the tonnage side, I think we had gone down last year first quarter. This first quarter, despite seasonally being slow, 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 LTV defined as per the RBS new regulation?

26:46 Or is it like to like comparable? It's not including interest. No. So it is so to some extent, it will include interest. But in terms of largely the LTV movement that you see from '57 to '64 is driven by the price of gold. So you you see that, you know, the price of gold has dropped by about eight and a half percent. Consequently, you know, you see a similar movement on the LTV side. So it's more of a denominator effect, I would say. So there is no numerator change, you are saying. Numerator computation change. It's not there. Yes. Okay. Okay. Got it. I'll come back in the queue. Thanks. Yes. The next question comes from the line of Piran with CLSA.

27:37 Please go ahead. Yes. Hi, can you call? Hello. Piran, you're not audible. Can you please speak a bit louder? 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 and 57 came mainly because of the price one. $14,001.61 was the price. Now June 30, that price is at $12,009.54.

28:24 That is why this is coming at a 66%. But normally, in this level, it is continuing 64% to 67 is the average LTV range in the normal scenario. Understood. So LTV should be range bound out here? Yeah. 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 every every way following that, last day's price. Understood. Understood. Just secondly, we have seen a lot of competition, you know, on the ground in cold loans, 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?

29:20 See, we will maintain a balance. Currently, our pricing is one of the lowest range in the industry. So with the market, we cannot be totally away from the market. So we have to move according to the market. But we have... I hope we'll be reasonably balanced in that. Okay. Okay. And lastly, just a question for, Bindu. She said this net loss on derecognition of financial instruments of 30 crores. Just can you explain what exactly that is? Is that a write off?

30:10 Yes. I... 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. Yes. 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 with Patel with Investec. Please go ahead. Yes. Hi. Thanks for the opportunity. I just had one question of the new guidelines that are there given the draft guidelines about the expert facilities. So I just wanted to know, is there any such facility or online? Can you repeat the question?

30:59 Yes. So there's a new draft guide new draft guidelines on the revolving facility. So I just wanted to know if there's any such facility of the online portfolio. So online loan doesn't come under the. It's in a normal loan only. It has been vetted in the regular inspection. Okay. So, like, how how does the functioning of this loan work once the principal is run down? We give the customer So the is run... When the principal is run down, yet the facility is time to the LTV permits.

31:46 He has the facility in the online to to replace that the the LTV he wants within the range permissible. That's all. Okay. It's not an hour. It is not an hour, sir. He can... He has the facility to replace setup. Yeah. That's a prevailing LTV. Within that prevailing LTV, we have. Sure. Thank you. Mr. Prithirat, does that answer your question? Yes, that's it. Thank you. Okay.

32:32 Thank you. The next question comes from the line of Basket Basu with Jefferies. Please go ahead. Yes. Good evening. I had three questions. Firstly, on the LTVs again, how are the origination LTVs? And do you have any loans which are originated at around eighty five percent LTV post the new loans? So, are first of all, I can say we are working within the regulations. Yeah. If that's the loan is the... We have two two point three less the the the regulations. Similarly, beyond that also, sir, there are certain caps. We have... The interest also is factored while calculating that.

33:22 Okay. But they said that. So for income generating assets, we grow up to 85%. This is the maximum. 85%. Then these are EMI products or EIA products. So the year, even though we have the gold collection with us, most the best is given for to assess this cash flow. These are all of the business people. Yes. Will not even otherwise qualifies for EMI products based on the cash flow based on whatever securities the letter insist upon. But that income generating product actually my understanding is there's no required LTV cap for that, right? I mean you can Yeah. There is no the with the regulation.

34:19 There is no LTV cap. But internally, we have to accept the cap to be 85% maximum. That's the max. Got it. And what proportion of your book will be say originated at 75% to 85% band? And what portion proportion would be the income generating loan in the bank? That I can be there separately. Yes. We have to take that aspect. Okay. And any what would be your branch expansion plans for this year and any acceleration expected? No. One good news for us is the requirement of prior approval from RBA has been removed.

35:10 This facility facilitates the opening of the branches. So we have a plan to open around 500 branches now. We are seeing now already, we are progressing in that. Sorry, 500 branches for this year? Yes. That is what is planned. And would this all be in stand alone or would this also include Ashiva? No. Is for Manappuram. For other businesses like or MFI, they have their own plans. No, mean, basically, gold loan branches. Gold loan branches. Yes.

35:58 Yes, yes. So Ashidwad Gold loan branches expansion will be on top of this or this is part of the 500 for the group? Yes, All these Manappuram Finance and all these will come under this 500. Yes, this is the plan. Got it. On the cost of sorry, please go ahead. Yes. So, this is for more long. Yes. Yes, yes. Got it. Got it. And my last question is on the cost of fund. We've seen about 20 bps increase in standalone. Where do you see this settling? Does it go up further in the next quarter? Guramish here. So in terms of cost of fund, given the overall environment where we have seen spikes in terms of the rates in the short run, we've seen a spike in the rates, we've seen by far also all time high levels.

37:03 So despite that, first quarter we've been able to manage 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 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 would expect some of this coming into our cost of fund as well. But it's very difficult to 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?

37:58 On an incremental basis, I would say we will be around the 8.8,900 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 Krishan Parekh with Morgan Stanley. Please go ahead. Thank you for taking my questions. My first set of questions is on the gold loan space. Going forward, I mean, we have the branch edition 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 FY twenty seven?

38:49 And also on the yield, 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%, may go down by 20 basis points or go up by 20 basis. Beyond that, we don't expect anything. So it will be around 18%. And the the brand expansion plan and the price remains stagnant. That is the the... No. The I'm not... The price is not a factor, which is determining brand expansion.

39:42 Brand expansion, scope is there because there are many places where we are not represented and we have potential workload. Those places are selected, partner identified, and selected for the branch office. Understood, sir. But what is the goal on growth guidance that you would like to give for FY 'twenty seven? We have grown around 12%, nearly 12% in Q1. We expect our expectation for growth of goal loan this year is some around 30%. Yes, because some quarters are the seasons, some quarters are off seasons.

40:30 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 what are our plans for those segments? We have temporarily stopped vehicle lending, vehicle finance. And we are we are focusing on collection. So our collections are improving because the road workers, etcetera. The other businesses like mortgage mortgage based loans, etcetera.

41:21 Yes. It is something that started picking up, and the asset quality is the more focused. Microfinance also... Yep. Our focus is on the quality. Yes. We are complying with the the federal norms, etcetera. And, yeah, the the the whole three remain level of, I feel like, 400 to 500 crores, this person in my. Understood. Thank you, sir. Just one last data keeping question. If you could provide the gold loans by ticket size, that would be helpful. Yes. I'll just talk.

42:10 Up to 1 lakh, it is 21%. 1 to 3 lakh, it is 30. About about 3 lakh, it is 49%. Thank you, sir. Thank you. The next question comes from the line of Gaurav with Capital Farming Consultants. Please go ahead. Yes. 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 FY '27.

42:56 Is that the correct statement? Yes. Yes. Yes. Okay. Yeah. I'm good. When I was just Yes. Just 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 four ninety branches across three quarters? Is it officially feasible? Or am I reading something wrong? The circular has come. After the circular removing the prior approval requirement, we still initiated the process. So then in 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.

43:46 And we are confident of reaching the top set of 500 branches, full on branches. Okay. That's great. So 500 branches is a feasible number of fresh branches. That's it. On microfinance side, when we look at the quarter on quarter numbers, right, Q4 of FY 'twenty six versus Q1 of FY 'twenty seven. I hope I'm audible, right? Yes. So it seems that, again, losses and provisions have increased, right, in Q1 of FY 'twenty seven versus Q4 of FY 'twenty six. So any specific reason why, again, the provisions have increased in microfinance? Or I would say, Ashish, microfinance?

44:31 So, Bundesh 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 where the provisions are. Q4 had a onetime around. Obviously, it was in single digits, I think, INR 9 crores or something. There were some one off credits that we had, which is why the q one is a more normalized number that you'll see. That's great. And within microfinance, what I would say, Ashirwad, 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 my Manappuram 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 core loan in Ashurban 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?

45:46 Yes. Certainly, there is a window of opportunity. And you rightly pointed out when you have over 30% of our book in the secured gold 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 place. If you allow me one more question. In presentation, you have mentioned that in Q1, you have started lending in Manappuram Housing Finance also, right? So is it pure play like it will be sitting on the books of Manappuram Housing Finance, or it is again kind of a core ending model like you have between Manappuram Finance and Ashivat Microfinance? And what would be the target of having the gold loan book in Manappuram Housing Finance going forward?

46:37 So it will be certainly be within the limit of qualifying assets here. Qualifying asset will be will always be maintained. No. Will it be kind of a core lending model, or you will be underwriting on the books of Manappuram Finance only? We... Yeah. We will resort to our lending model also, not only with the parent company, but the banks also. We are We are approached to the banks also in Manappuram Finance also for collating with the banks. Thanks, Anita. Thank you. The next question comes from the line of Anuj Jan with ValueQuest Capital.

47:29 I have one question that what is the new management's long term strategy with respect to microfinance business? Do we intend to grow its share of the portfolio like it was few years earlier or to maintain at the current levels? Or do we do do we have any strategy or any thinking to reduce the exposure going forward? So what is the long term strategy for microfinance business? I will tell at the group level, we want to contain microfinance that's below and to set at the consolidated level. And we want to grow that along with the overall growth, but it is stable than where the asset quality is the prime concern.

48:23 So we stick to the asset quality and we always wanted to have a prudent growth in the MRP portfolio. Understood. Thank you. Thank you. The next question comes from the line of Anshooman Deb with ICICI Securities. Please go ahead. Yes. Hi. Good evening, and thanks for the opportunity. So I have two questions. One is on the branch opening. So I think, you know, which is a... In the past, we have seen branches as being one of the big levers of volume growth. So with 500 branches, 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.

49:18 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. Thank you. So the branch opening, we have assessed to where the growth possibilities are high. So I can say, yes, around top, 60% will be in South And Central India. That is five states of South India plus Maharashtra.

50:03 And some say some 51% will be in Eastern states like Bikha, West Bengal, Odisha, etcetera, where we have seen good potential and the balance in the stock India. And sir, on any anything beyond that 500, is it a one, two year thing you expect more branches to continue to open? Yes, yes. So our present target is around 500 branches. And after that, we'll examine and proceed. Thanks. And on the second question? What was the second question? Yes. So my question was on the strategic priorities. I think we have expect some priorities and you already mentioned that MANAPPURAM business being less than 10%.

51:02 That was one of the things. I'm very happy to say that our focus will be more on Gulu. So we want to maintain over 75 to around 75 to 80% of the consolidated AEM in gold. And the balance would be... Yeah. The... Our prime trust would be secured lending, like, the mortgage based, say, monthly lending plus affordable housing. This is this is the biggest. The the... We are not giving any priority during this year. So we we we don't want to... Was any more, you know, we could launch during this year.

51:55 After one year, probably, you know, do in FY '28, etcetera. We may consider whether to restart or not. So as I said, the microfinance will be contained between eight to 10%. That will be the cap on a consolidated basis we will put. And sir, on the, like, OpEx, you know, efficiency, you you also had some, I think, which is in OpEx. We we expect, I believe, some efficiency on those front. Well, really, because our EM per brand is growing. It has grown considerably.

52:41 Right? So you can see the offers also offers to AM is also steadily coming down. We we hope to improve that going forward. Great, sir. Thank you. Thank you so much. Will get back in the queue. Thank you. The next question comes from the line of Prateep Agarwal with three sixty one Capital. Please go ahead. Yes, hi sir. Congratulations on good set of numbers. So I have couple of questions. One, as we have seen the go on market has evolved many fold over the last four, five years. Have you seen any drastic change in the customer profile? So, like, we used to comment that about one third business used used to come from... For emergency use, one third for every 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 an industry as a whole.

53:44 So last question on that. Yeah. Earlier, this was seen as a discussed products. Now with the publicity given by all institutions, including banks, more and more business people work, particularly in Mozambique, and they are availing the loan. And the government's intention was... And also the regulator's intention is to encourage the Mozambique lending using gold as collateral. So that's... Otherwise, the gold is lying idle with them in their lockers, etcetera, etcetera. To bring that idle gold into the Amazon funding is the part... Priority is the priority of the policymakers.

54:29 So based on this arrangement, that's why our biggest... Like, yeah, to go on little... To liberal in permitting the government companies to open more branches without any prior approval, which was for case failure, etcetera. And also promoting income generating go on, which is where there is no LTV even though we have capped at 85% based on cash flow, etcetera, etcetera. So so all these initiatives are from the regulator from the regulators. Yes. So so so you know way the it is more of the the profile of the customer is moving to the business class.

55:15 Does does it mean that you have about 49% of the proportion into more than three lakh ticket size. So what would be the real difference between say in that segment, say about three lakh ticket sales customers and, say, in one to three lakh ticket sales? Well, I'm assuming that, you know, this higher three lakh plus ticket size would be largely business use. Right? So the... Either we... So there is... There... It remains... The mix remains more or less the same. Okay. But consider the mix only, and we expect the yield to be around 18%. Okay. Okay. Okay. Yeah. We we know that when, yeah, we we know the mix also. So with the only mix also, yeah, this is the expectation of, yeah, at least for during the next one year.

56:06 Secondly, you know you know, as the competition has increased many fold, are we facing any challenges on the employee side? Has that attrition increased or how that has moved over the last, say, two two, three years? Some color on that. So we we don't face certain... We we are not facing any challenge in the recent times. The... Actually, the attrition has come down because of many policy changes we made, etcetera, the attrition has actually come down. So we are not seeing any attrition at the top level who are handling more loans. Okay. Any number you would like to give at at the branch level, you know, what is the Usually, our our level remains around 222.3% per month.

56:53 Yeah. And the the... It does not it does not even now. Okay. Okay. Okay. Okay. And lastly, you know, any any guidance you would like to give, you know, in terms of ROE and ROE? Where do you see, you know, once our business stabilizes in terms of... Since the... On the yield side, it has largely stabilized. So where do you see your ROE ROE stabilizing, say, over the course of next few years? So our ROE we are targeting an ROE from 3.545% to 4%. And targeting an ROE of percent to 18%, this is the ROE target. Okay. Okay. Okay. And any time frame you would like to give, how by when you... Yes. We expect ROAs and ROEs to consistently grow.

57:49 And in three years, our expectation is to take that to ROE to around 18%. Okay. Okay. Okay. Good to hear that. That's it from my side. Thank you so much, and best of luck for the next quarter. Thank you. The next question comes from the line of Shripal Doshi with Equiris. Please go ahead. Sir, just had a question that what is the yield differential at blended level for income generating loans and for the consumer? Income generating Like, ticket rates are 50 to 75 bps higher in income generating loan.

58:38 Okay. Okay. So, it's higher versus the consumer loan, right, or the income generating loan, between to 75 basis points? And then as a thought process, like what percentage of our portfolio would we want to have this coming from income generating or as as a segment that's in the next one year time period? Is that the newer segment just scaling up? So all depends on the comfort we are getting. We are continuously watching this portfolio. So from the... Now or whatever we have given, the the experience is very good. So in in spite of that, we are not one beyond 88%. Even though some... We have seen some lending institutions lending even more than that. So we have... I'm not a strictest to that. So the LTV there also ranges from, yeah, 75 to 85 based on the assessment of the Part C and the cash flow. It's going to have been a so everything just like any other loan which are granted based on the cash flow.

59:50 Okay. But sir, as a so we don't have any clear thought process as yet on in terms of the mix? Yes, because from this product swap just started. So we we have... And we are continuously watching. The... Our experience remains very good. Yeah. And so in the... So we are not close to fix it anything. So the portfolio is still very small compared to the overall portfolio. Got it. Got it. Okay, sir. Thank you so much for answering your questions. Thank you. The next question comes from the line of Sanket Chera with DAM Capital. Please go ahead.

1:00:37 Yes. Hi, sir. Congrats on good set of numbers. I just wanted to check on the new CEO if you can just elaborate on which all segments he has looked after in in his last ten to fifteen years or the ten years of staying at IDFC Bank. We have just written legal liabilities, but what what we found common or suitable experience in 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 in...

1:01:24 With the multiple lending institutions. He has both worked on the liability side as well as the retail lending side. His experience in retail lending is good. Okay. Sure. Sure. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing comments.

1:02:12 Thank you so much. You have asked many relevant questions. Try to preserve the data we have. And yes, those who want that more detail, you can remain in touch with us. Thank you. Thank you sir. On behalf of Manappuram Finance and that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.