Manba Finance Limited — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

Manba Finance delivered strong FY25 results with significant growth in NII, AUM, and disbursements, coupled with improved asset quality and capital adequacy. Q4 FY25 saw some sequential moderation in AUM and NII growth attributed to seasonality and strategic liquidity management, which also led to a slight dip in RoA. The company highlighted its robust collection mechanisms and plans for future geographical expansion and potential new product offerings.

Highlights

  • FY25 Net Interest Income (NII) grew 49% YoY to INR129 crores.

  • FY25 Loan Disbursements grew 33% YoY to INR842 crores.

  • Asset Under Management (AUM) grew 42% YoY to INR1331 crores as of March 31, 2025.

  • Capital Adequacy Ratio (CAR) improved to 29.81% due to IPO funds.

  • GNPA reduced to 3.23% and NNPA to 2.45% as of March 31, 2025.

Concerns

  • QoQ AUM growth was slower (marginal INR31 crores increase) due to seasonality.

  • QoQ interest income growth was lower than AUM growth due to seasonality and repayment cycle.

  • QoQ other expenses increased 31% due to higher PCR and ARC revaluation.

  • QoQ other operating income declined by INR1.25 crores due to lower disbursements and associated processing fees.

  • Return on Assets (RoA) slightly decreased QoQ from 3.18% to 3.10% due to higher year-end liquidity.

Key financials

3 periods

Headline

  • Asset Under Management (Mar 31, 2025)
    ₹1,331 Cr
    YoY +42%
  • Cost of Borrowing
    10.8%
  • Gross NPA (Mar 31, 2025)
    3.2%
  • Net NPA (Mar 31, 2025)
    2.5%
  • Capital Adequacy Ratio (Mar 31, 2025)
    29.8%
  • Provisioning Coverage Ratio Increase
    4%
  • Return on Assets (QoQ change)
    -8%

Q4 FY25

  • Net Interest Income
    ₹36.5 Cr
    YoY +38%
  • Net Interest Margin
    13.6%
  • Profit After Tax
    ₹8 Cr

FY25

  • Net Interest Income
    ₹129 Cr
    YoY +49%
  • Net Interest Margin
    14%
  • Profit After Tax
    ₹38 Cr
    YoY +21%
  • Loan Disbursements
    ₹842 Cr
    YoY +33%

What they filed

Q1 FY27: revenue up 38.8%, net profit up 30.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue65 69 68 67 78 +20%90 +30%93 +37%93 +39%
Net profit12 13 8 10 11 −8%13 +0%11 +38%13 +30%
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.

Capital allocation

high confidence
  • Liquidity Cash ₹111 Cr Healthy liquidity buffer of approximately INR100 crores maintained at all times during the year. Bank balance of INR111 crores on the asset side at year-end, maintained to cover 1.5 months of business development amount and avoid cash flow mismatch.
    Additionally, we have consistently maintained a healthy liquidity buffer of approximately INR100 crores at all times during the year, reinforcing our financial resilience and operational readiness. ... So, that means, sir, we are carrying lot of cash in our books always or this is at year-end that we have got such a big amount. Yes. So, we always keep a high liquidity at least for 1.5 month's business development amount in hand. And also what we have in the past experienced, we had like in the month of April due to the transfer and everything we get some lesser sanctions from the bankers and the NBFC. So, that's why we used to keep some higher liquidity at the end of the March to avoid any mismatch in the cash flow.

Guidance & targets

Market Share

  • EV Financing Market Share in operational areas Market Share · Current · High confidence around 8%
    Yes. So, market sharing in the area of operation, as I directly told that we are in 6 states and with 73 locations. So, in area where we are present, our market share in the EV is around 8%.

    — Manish Shah

Geography Expansion

  • New Geography Expansion Geography Expansion · Post-November 2025 (after next 9 months) · Medium confidence Start after the season
    So, because we have started some of the locations in last 18 to 24 months only, so we would like to further penetrate the existing locations first. So, the geography expansion will not take place in the next first 9 months. After the season gets over, we will start about the new geography expansion.

    — Manish Shah

Product Offerings

  • Gold Loan and Loan Against Property Product Offerings · Up to November 2025 · Medium confidence Under consideration, not before the season
    Yes, that is gold loan and loan against property are, you know, under the consideration, but not before the season. This season, that is up to November.

    — Manish Shah

What to watch in Q1 FY26

New Geography Expansion

After the season (post-November 2025)
Current Penetrating existing 73 locations in 6 states.
Target Commencement of new geography expansion.

Why it matters

Indicates future growth strategy and potential for market share increase beyond current operational areas.

So, the geography expansion will not take place in the next first 9 months. After the season gets over, we will start about the new geography expansion.

Risks & concerns

  • Seasonal fluctuations in AUM growth and interest income

    medium

    AUM growth and interest income are slower in Q4 (Jan-Mar) due to fewer festivals compared to Q3 (Oct-Dec), leading to QoQ fluctuations.

    Management acknowledged

  • Impact of higher liquidity on profitability metrics (RoA)

    low

    Maintaining a higher liquidity buffer at year-end, while prudent for cash flow management, led to a slight decrease in Return on Assets (RoA) from 3.18% to 3.10% QoQ.

    Management acknowledged

Q&A highlights

7 direct
Slower QoQ AUM growth and lower interest income growth compared to AUM growth. Direct
AUM, this is our seasonal month where in the October, November mainly, 2 wheeler generally mostly sells more in Ganpati, Dussehra and Diwali. In Jan, Feb, March, there are hardly any festivals were there. And as our AUM has been already grown by 40%, more than 40%, so there is a lot of inflow of, you know, repayment is also there from the same loan which we have disbursed in last few months. ... So, the income which we have received on this major portfolio was from Q3 to Q4. It was not for the entire year.

Management explained the sequential slowdown in AUM and NII growth by attributing it to seasonal demand patterns for 2-wheelers and the timing of income recognition from the loan portfolio, providing context for short-term fluctuations.

Asked by Nemin Doshi, Geojit PMS

Significant QoQ increase in other expenses. Direct
So, QoQ, the major increase in the expense was due to the increase in PCR. We have increased our PCR from 20% to 24% on the stage 4 asset, stage 3 asset. So, in that case, the 4% increase has costed around INR2.30 crores. And secondly, there was a ARC revaluation of the ARC asset, due to which we had to provide for a INR1 crore in that case.

The response clarified that the increase in other expenses was primarily due to a strategic increase in provisioning coverage ratio and ARC revaluation, indicating proactive asset quality management rather than operational cost inflation.

Asked by Nemin Doshi, Geojit PMS

Decline in other operating income QoQ. Direct
So, the other income is also connected, linked with the business only. So, it was like processing fees in which we have received. During the Q3, there was a good business, means higher business due to the season. It was INR326 crores. And in quarter 4, we have done a disbursement of INR171 crores. So, there is a INR1.25 crores decline due to the processing fees.

Management explained that the drop in other operating income was directly linked to lower loan disbursements in Q4 compared to the seasonally strong Q3, impacting processing fees, which helps understand revenue components.

Asked by Nemin Doshi, Geojit PMS

Market share in EV financing and future geographical expansion plans. Direct
in area where we are present, our market share in the EV is around 8%. ... So, the geography expansion will not take place in the next first 9 months. After the season gets over, we will start about the new geography expansion.

This provided specific data on the company's current EV financing market share and outlined a clear strategy for future growth, prioritizing deeper penetration in existing markets before expanding geographically.

Asked by Vishal Bhalada, Individual Investor

Strategies employed to maintain the lowest NPAs in the industry. Direct
we have an in-house, you know, collection team who collects almost 85% of our total bounced EMIs. And we have a separate team for non-starter and early defaulters. ... We always believe that we require minimum 20% of customer equity.

The detailed response highlighted the company's robust in-house collection mechanisms, early intervention for defaulters, and stringent loan sanctioning criteria (minimum 20% customer equity), which are critical for maintaining strong asset quality in the NBFC sector.

Asked by Tushar, Individual Investor

Rationale for carrying a high bank balance at year-end and potential new product offerings (gold loans, housing finance). Direct
we always keep a high liquidity at least for 1.5 month's business development amount in hand. ... Gold loan and loan against property are, you know, under the consideration, but not before the season. This season, that is up to November.

Management clarified the strategic importance of maintaining a liquidity buffer for business development and cash flow stability, while also signaling potential future diversification into gold loans and loan against property, indicating future growth avenues.

Asked by Sanjeev Damani, SKD Consulting

Reason for the slight QoQ decrease in Return on Assets (RoA). Direct
No, there is no not a major decrease it is decreased from 3.18 to 3.10 and it is because of the higher liquidity and everything we have kept at the end of the year that's why there is a slight decrease in the return on asset.

The response addressed a potential concern about profitability, explaining that the minor dip in RoA was a consequence of a strategic decision to hold higher liquidity at year-end, rather than an operational issue, reassuring investors about underlying performance.

Asked by Mohit Upadhyay, Individual Investor

2 min read 5 chapters

Detailed narrative

Strong Financial Performance Driven by Growth and Margin Expansion

Manba Finance reported robust financial performance for FY25, with Net Interest Income (NII) growing 49% year-on-year to INR129 crores and Profit After Tax (PAT) increasing 21% to INR38 crores. The company's Asset Under Management (AUM) expanded significantly by 42% year-on-year, reaching INR1331 crores as of March 31, 2025. Loan disbursements for the year also saw a healthy 33% growth, totaling INR842 crores, supported by improved Net Interest Margins (NIM) of 14.03% for FY25, partly due to the utilization of IPO equity proceeds.

Strategic Partnerships and EV Financing Focus

The company announced key partnerships aimed at bolstering its market presence and supporting the electric vehicle (EV) financing segment. Collaborations with BGauss Auto Private Limited for retail financing, Prosperity for a digital platform to streamline credit flow and risk management, and Fin Coopers Capital for enhanced vehicle financing options are expected to expand reach, particularly in Madhya Pradesh, and make EV financing more accessible. Manba Finance currently holds an 8% market share in EV financing within its operational areas.

Proactive Asset Quality Management and Capital Strength

Manba Finance demonstrated strong asset quality management, reducing its Gross Non-Performing Assets (GNPA) to 3.23% and Net Non-Performing Assets (NNPA) to 2.45% as of March 31, 2025. This was supported by a strategic 4% increase in its Provisioning Coverage Ratio (PCR), from 20% to 24% on Stage 3 and Stage 4 assets, reflecting a proactive approach to tightening credit norms. The company also maintained a robust Capital Adequacy Ratio (CAR) of 29.81%, significantly improved by funds raised through its IPO.

Seasonal Fluctuations and Liquidity Management Impact on QoQ Metrics

While annual performance was strong, Q4 FY25 saw some sequential moderation. QoQ AUM growth was marginal (INR31 crores), and interest income growth was lower than AUM growth, primarily attributed to the seasonal nature of the 2-wheeler market (fewer festivals in Jan-Mar compared to Oct-Dec) and the company's repayment cycle. A slight decrease in Return on Assets (RoA) from 3.18% to 3.10% QoQ was noted, which management attributed to maintaining a higher liquidity buffer of INR111 crores at year-end for financial stability and to mitigate cash flow mismatches.

Operational Efficiency and Future Growth Outlook

The company highlighted its operational efficiency, with 60% of loans sanctioned in one minute and 92% on the same day. Its in-house collection team effectively manages 85% of bounced EMIs, contributing to low NPAs. Looking ahead, Manba Finance plans to further penetrate existing locations before embarking on new geographical expansion post-November 2025. The company is also considering diversifying its product portfolio into gold loans and loan against property, with decisions expected after the current season.

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