Despite Manappuram Finance's stock rising by around 43% in one year, most brokerages are still advising caution.
Gold loans grew 12% QoQ in Q1FY27, with 3.2 lakh new customers added during the quarter.
The online gold loan book rose to 86% of the total, while gold loans accounted for 82% of AUM. Gold loan yields rose 60 bps QoQ to around 18%, with management expecting them to remain at that level.
Vehicle finance remains under pressure, with no fresh disbursements planned in FY27 and GNPA rising to 13.3%.
Manappuram Finance plans to add 500 branches in FY27 to support gold loan growth, with the company expecting the segment to grow 25-30% during the year as customer traction remains strong.
The expansion follows the removal of the RBI's prior approval requirement for opening branches. Manappuram added 10 branches in Q1FY27 as it initiated the expansion programme and expects the pace to accelerate from Q2, according to an Axis Securities report. Around 60% of the new branches are planned for South and Central India, including Maharashtra, while about 25% will be added in Bihar, West Bengal and Odisha.
Gold loans grew 12% sequentially in Q1FY27 and were the primary driver of overall AUM growth. Manappuram added 3.2 lakh new customers during the quarter, taking its total customer base to 26.5 lakh. Management indicated that the growth momentum remained strong through July and August.
The online gold loan book accounted for around 86% of the total gold loan book in Q1, up from 65% a year earlier. Gold loans accounted for 82% of overall AUM at the end of the quarter, compared with 80% in the previous quarter.
The company expects gold loans to remain the dominant part of its portfolio, accounting for 75-80% of consolidated AUM. Non-gold growth will focus on secured segments such as MSME lending and affordable housing, while MFI is expected to remain at 8-10% of AUM.
Rising yields
Manappuram's gold loan yield improved by around 60 basis points sequentially to about 18%, following pricing actions. Management expects yields to remain around 18% going forward, while cash-flow-assessed income-generating gold loans for business customers carry a 50-75 basis-point higher blended yield than consumer gold loans.
The company is taking a more cautious approach to vehicle finance, with no fresh disbursements planned during FY27 and a reassessment scheduled for FY28. Vehicle finance remains the key asset-quality pressure point, with GNPA rising to 13.3% from 10.4% sequentially.