Manappuram Finance Limited — Q4 FY26 earnings call

Call held 4 May 2026

Management summary

Manappuram Finance delivered a strong Q4 FY26 performance, primarily driven by robust growth in its core gold loan business and a significant turnaround in the microfinance segment's profitability. While consolidated AUM and Q4 PAT showed strong sequential and year-on-year growth, full-year PAT declined. The company is focusing on asset quality improvements in non-gold portfolios and strategic leadership strengthening to drive sustainable growth and achieve targeted ROE.

Highlights

  • Consolidated AUM reached INR63,798 crores, up 22.4% sequentially and 48.3% year-on-year, driven by gold loan growth.

  • Gold loan AUM stood at INR50,953 crores, registering 31.5% quarter-on-quarter and 99.1% year-on-year.

  • Asirvad Microfinance reported a profit of INR13 crores in Q4 FY26, a significant turnaround from a loss of INR156 crores in Q3 FY26, supported by improved collection efficiencies and write-backs.

  • Consolidated PAT for Q4 FY26 was INR405 crores, reflecting an almost 70% quarter-on-quarter increase.

  • Standalone GNPA improved to 1.81% as on March 31, 2026, down from 2.61% in the previous quarter, and standalone borrowing cost decreased by 17 bps in Q4 FY26.

Concerns

  • Full Year FY26 Consolidated PAT was INR993 crores, down 17.5% year-on-year.

  • Standalone PAT for Q4 FY26 was INR376 crores, marginally down 1.5% sequentially and 9.4% year-on-year, impacted by a one-time write-off of INR84 crores on vehicle loans.

  • Vehicle Finance AUM declined by 16.8% quarter-on-quarter and 37.3% year-on-year to INR2,991 crores.

  • MSME and allied businesses saw their GNPA increase to 7.1% from 6.1% in the earlier quarter.

  • Consolidated Provision Coverage Ratio remained relatively low at 27.34%.

Key financials

3 periods

Headline

  • Consolidated AUM
    ₹63,798 Cr
    YoY +48.3% QoQ +22.4%
  • Consolidated Revenue
    ₹2,614 Cr
    YoY +10.7% QoQ +11%
  • Consolidated GNPA
    2.1%
  • Provision Coverage Ratio
    27.3%
  • Capital Adequacy
    21.3%
  • Book Value Per Share
    ₹170.9

Q4

  • Consolidated PAT
    ₹405 Cr
    QoQ +70%

FY26

  • Consolidated PAT
    ₹993 Cr
    YoY -17.5%

What they filed

Q1 FY27: revenue up 45.9%, net profit up 40.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,748 1,799 1,739 1,743 1,820 +4%1,918 +7%2,158 +24%2,543 +46%
Net profit475 453 414 392 376 −21%381 −16%376 −9%552 +41%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentAUMGNPA
Gold Loan₹50,953 Cr—
Standalone (MAFIL)₹55,952 Cr1.8%
Asirvad Microfinance₹6,794 Cr4.8%
Vehicle Finance₹2,991 Cr10.4%
MSME and Allied Businesses—7.1%
Home Loan——

Capital allocation

high confidence
  • Dividend ₹0.5/share (interim)
    The Board has declared an interim dividend of INR0.50 for this quarter.
  • Liquidity Liquidity disclosed Strong capital position with capital adequacy at 21.3%, well above regulatory requirements, and diversified funding sources across banks, capital markets and securitization. The company maintains a conservative positioning stance and closely monitors early warning indications across businesses.
    Our balance sheet remains healthy. Capital adequacy at 21.3%, well above the regulatory requirements. Strong equity position with diversified funding sources across banks, capital markets and securitization. We continue to maintain a conservative positioning stance and closely monitor early warning indications across businesses.

Guidance & targets

Profitability

  • Consolidated ROE Profitability · High confidence over 15%
    We are targeting over 15% for ROE.

    — V.P. Nandakumar

  • Consolidated ROE Profitability · next 1-2 years · Medium confidence 13-16%
    So we expect to stabilize somewhere around 13% to 16% in the next 1 or 2 years' time.

    — V.P. Nandakumar

Margin

  • NIM / Yield Margin · High confidence 17.5%-18%
    We expect the yield to remain between the 17.5% - 18%. We believe that it will not go down.

    — V.P. Nandakumar

Volume

  • Gold Loan Volume Growth Volume · this year · Medium confidence more than last year
    So as I said, this year's volume growth in gold loan growth is expected to be more than what we have achieved during last year.

    — V.P. Nandakumar

Capacity

  • Gold Loan Branch Expansion Capacity · this year · High confidence 500-550 branches
    So we plan to open some 500 to 550 branches in gold loan during this year.

    — V.P. Nandakumar

Collection Efficiency

  • Asirvad Collection Efficiency Collection Efficiency · Medium confidence 75% overall, above 99% with guardrails
    Manoj's expectation is that frankly is 75%. In that the collection efficiency stands above 99% and hope to maintain that with the guardrails, etcetera.

    — V.P. Nandakumar

AUM

  • Overall Consolidated AUM Growth AUM · Medium confidence reasonably good level, more volume than current year
    So with all these, we expect the overall consol AUM to grow at a reasonably good level. We expect that to be maintained more than during the current year with regard to volume. That is our expectation.

    — V.P. Nandakumar

Credit Cost

  • Cost of Credit Credit Cost · subsequent quarters · Medium confidence improvement
    Overall, if you see sequentially, I think the cost of credit we will see an improvement in the subsequent quarters. And that will basically help in terms of accretion as far as PAT is concerned.

    — V.P. Nandakumar

What to watch in Q1 FY27

Asirvad Microfinance AUM Growth & Asset Quality

next quarter
Current AUM INR6,794 crores (up 11.9% QoQ), GNPA 4.85%, Net NPA 1.6%, New book collection efficiency 99.83%.
Target Continued AUM growth, sustained profitability, and further improvement in asset quality.

Why it matters

Asirvad's turnaround and sustained profitability are key to consolidated performance, especially given its past challenges and the management's focus on stabilization.

Asirvad Microfinance continue to operate in a cautious environment during Q4 FY '26. The strategic actions we initiated over the past few quarters, including tighter underwriting, calibrated disbursements, strengthened collections and geographical optimization are beginning to yield gradual improvements. We expect the business to stabilize progressively with a sharper focus on sustainable growth and improved risk-adjusted returns.

Risks & concerns

  • Macroeconomic headwinds (geopolitical tensions, inflation, interest rates, weakening rupee)

    medium

    The operating environment is tempered by geopolitical tensions, inflationary tendencies, firming interest rates, and a weakening rupee.

    Management acknowledged

  • Competitive lending landscape

    medium

    The lending landscape remained competitive, requiring a sustained focus on asset quality and prudent underwriting standards.

    Management acknowledged

  • Challenges in unsecured segments, particularly microfinance

    medium

    The microfinance segment is still in a recovery phase, requiring a cautious stance and calibrated expansion.

    Management acknowledged

  • Stress in certain non-gold portfolios (Vehicle Finance, MSME)

    medium

    These segments witnessed moderation in portfolio levels and an increase in GNPA in MSME, necessitating tightened underwriting and strengthened collections.

    Management acknowledged

Q&A highlights

8 direct
Provision breakdown and vehicle loan write-off impact on PAT Direct
majority of it is from non-gold only. In that, if you see the notes to accounts almost INR136 crores is the write-off of the vehicle finance book. So that has elevated the bad debts in this quarter. ... INR84 crores is net of provision.

Clarifies the significant impact of non-gold portfolio stress, particularly vehicle finance, on overall provisions and PAT, with a specific figure for the write-off.

Asked by Piran Engineer (CLSA)

Asirvad Microfinance credit cost sustainability and ECL revision Direct
the credit cost has improved primarily on account of enhanced collection efficiencies, and it's also been complemented with an increase in our book. ... Yes, completely sustainable. ... So MTM plus the ECL change on a pretax basis is about INR128 crores. Post-tax, it would be about INR96 crores.

Addresses concerns about the low credit cost in Asirvad and confirms management's confidence in its sustainability, attributing it to structural improvements and one-off write-backs.

Asked by Zhixuan Gao (Schonfeld)

MFI collection efficiency and portfolio mix (new vs. old book) Direct
overall, for both the new book and the old book put together, it stands at 95%. ... new book is 59% and old book is 41%. ... in the new book, which is 59%, my ex-bucket collection efficiency stands at 99.83%.

Provides granular detail on the improving collection performance in the microfinance segment, highlighting the strong performance of the newer book and its growing share.

Asked by Shreepal Doshi (Equirus Securities)

Impact of new LTV regulations on gold loans and yield Direct
The new regulation applicable from April 1, 2026, and we are adhering to the regulation, based on ticket size interest accrued for the contracted period will also be added. That will be the loan amount, and there are two types of loans, consumption loans and income generating. ... There has been a reduction in the LTV because under the new regulation, we have to factor the interest accrued.

Explains the operational changes and potential impact on LTV and product offerings due to new regulatory guidelines, which is crucial for the core gold loan business.

Asked by Shreepal Doshi (Equirus Securities)

Sustainability of Asirvad's profitability and overall ROE targets Direct
Asirvad Q4 profit of INR 13 crore I mean the provision was about, INR9 crores was largely on account of certain MTM credits that we got on the security receipts. ... So we are expecting the consolidated ROE to improve because gold, we are, reducing our opex. ... Stabilize ROE at 13-16% in next 1-2 years.

Clarifies the drivers behind Asirvad's return to profit and provides a forward-looking target for consolidated ROE, linking it to operational efficiencies and gold loan growth.

Asked by Rohit Ahuja (Lotuslion Venture)

FY27 AUM growth guidance and strategic initiatives Direct
We are seeing good opportunities to grow gold loan because now with the new regulation, 2 types of products, consumption loan as well as income generating gold loan. ... So we plan to open some 500 to 550 branches in gold loan during this year. ... Overall consol AUM to grow at reasonably good level. Expect more volume than current year.

Provides key strategic initiatives and expectations for AUM growth across segments for the upcoming fiscal year, including new product offerings and branch expansion.

Asked by Kamal (Jeffries)

New leadership appointments and Deepak Reddy's health status Direct
Deepak Reddy is undergoing treatment in Singapore. So yes, we are not sure when he will join, but his health is improving. ... Manoj Pasangha has taken the charge as the CEO. ... At the Group level, Buvanesh has joined as a Group CFO. Similarly, Ashish has joined as the Group CCO.

Provides an update on key leadership changes and the health status of a prominent figure, which can impact future strategic direction and stability of the company.

Asked by Agam (Aagam Investments)

Auction number for the quarter Direct
INR15 crores during the quarter.

Provides a specific operational metric related to asset recovery, indicating the volume of assets auctioned in the quarter.

Asked by Prithviraj Patil (Investec)

2 min read 5 chapters

Detailed narrative

Robust Gold Loan Growth Fuels Consolidated AUM Expansion

Manappuram Finance reported a strong Q4 FY26, with consolidated AUM reaching INR63,798 crores, marking a 22.4% sequential and 48.3% year-on-year increase. This growth was predominantly driven by the gold loan segment, which saw its AUM surge to INR50,953 crores, up 31.5% quarter-on-quarter and 99.1% year-on-year. The gold loan business now constitutes 80% of the consolidated AUM, benefiting from supportive gold prices and strong customer demand, with management planning to open 500-550 new branches in FY27.

Asirvad Microfinance Returns to Profitability with Improved Asset Quality

The Asirvad Microfinance segment demonstrated a significant turnaround, reporting a profit of INR13 crores in Q4 FY26, a substantial improvement from a loss of INR156 crores in Q3 FY26. This was attributed to enhanced collection efficiencies, growth in the loan book, and a write-back of INR96 crores (post-tax) from MTM credits and improved performance of the new loan pool. Asirvad's AUM grew 11.9% sequentially to INR6,794 crores, with the new book (59% of portfolio) showing an ex-bucket collection efficiency of 99.83%.

Mixed Performance and Corrective Actions in Non-Gold Portfolios

While gold loans performed strongly, non-gold segments presented mixed trends. The vehicle finance business experienced a decline in AUM by 16.8% QoQ and 37.3% YoY to INR2,991 crores, with a one-time write-off of INR84 crores impacting standalone PAT. The MSME and allied businesses saw their GNPA increase to 7.1% from 6.1% in the prior quarter. Management is actively implementing tightened underwriting standards, intensified recovery efforts, and digital collection strategies to moderate slippages and improve asset quality in these stressed segments.

Strong Profitability and Capital Adequacy Maintained

Consolidated revenue for Q4 FY26 stood at INR2,614 crores, reflecting 10.7% YoY and 11% QoQ growth, leading to a PAT of INR405 crores, up nearly 70% sequentially. Despite a 17.5% YoY decline in full-year PAT to INR993 crores, the company maintains a healthy balance sheet with a capital adequacy ratio of 21.3% and a consolidated net worth of INR16,051 crores. Management expects NIMs to stabilize between 17.5%-18% and aims for a consolidated ROE of over 15%, or 13-16% in the next 1-2 years, driven by operational efficiencies and gold loan growth.

Strategic Focus on Digitalization and Leadership Strengthening

Manappuram Finance is actively investing in digital capabilities, analytics, and process efficiencies to enhance customer experience and drive productivity across its branch network. The company also announced several key leadership appointments at the group level and for its subsidiaries, including a new Group CFO, Group CCO, Group Legal Counsel, COO, and new CEOs for Asirvad Microfinance and Manappuram Home Finance. These strategic hires are expected to bolster execution capabilities and support the company's diversified growth strategy and focus on risk-adjusted returns.

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