Manappuram Finance (531213) Q2 25/26 earnings summary

Executive summary

• Consolidated net profit for Q2 FY26 rose to INR 217 crore from INR 132 crore in Q1 FY26, but declined 62% YoY; driven by reduced losses in microfinance subsidiaries and strong gold loan performance.

• Consolidated AUM reached INR 45,789.42 crore as of 30 September 2025, up 3.4% quarter-on-quarter; gold loan AUM grew 29.3% year-on-year to INR 31,505 crore.

• Gold loans now comprise 69% of consolidated AUM, up from 53% a year ago, with AUM per branch increasing due to improved customer retention and collateral base.

• Interim dividend of 50% declared; focus remains on responsible lending, technology-driven efficiency, and co-lending partnerships.

• Asirvad Microfinance reported a significant YoY decline in revenue and profitability, with a PAT loss of INR 168 crore in Q2 FY26.

Financial highlights

• Stand-alone PAT for Q2 FY26 was INR 376 crore; consolidated PAT excluding Asirvad was INR 385 crore, down 4.1% due to higher vehicle finance provisions.

• Net interest income was flat QoQ at INR 1,408 crore, but down 18.5% YoY; OPEX decreased 1.4% QoQ but increased 5.8% YoY.

• Borrowing cost reduced by 12 basis points during the quarter; consolidated cost of borrowing improved to 9.1% in Q2 FY26.

• Capital adequacy ratio strong at 28.32%; net worth at INR 12,712 crore.

• Cash & cash equivalents at INR 2,509 crore, down 38% QoQ and 49.2% YoY.

Outlook and guidance

• Gold loan business expected to drive growth, with profitability maintained despite lower yields; targeting 20%-25% CAGR in gold loans even if gold prices decline.

• Non-gold businesses to follow a consolidate-to-growth strategy, with focus on improving credit performance and profitability.

• Cost of funds expected to continue declining by 12 basis points per quarter for at least the next two quarters.

• Strategic roadmap for medium to long term to be presented by Q4 FY26.

• Growth strategy includes calibrated expansion in MSME, housing, and vehicle finance, with cross-sell opportunities.