Manappuram Finance Q2 FY27 Earnings Call: PAT Jumps 223% YoY, Reaffirms 30% FY27 Growth

Gold-led quarter: PAT more than doubles YoY on AUM surge

• Consolidated AUM of Rs.73,303 Cr — up 5.3% QoQ and 50.1% YoY (one segment cited 60.1% YoY); gold loan AUM of Rs.60,640 Cr rose 92.5% YoY and now forms 83% of consolidated AUM vs 69% in Q2 FY 2025-2026.
• Consolidated PAT of Rs.701 Cr — up 20% QoQ and 223% YoY (vs Rs.217 Cr in Q2 FY 2025-2026); H1 FY 2026-2027 consolidated PAT at Rs.1,286 Cr, up 268% YoY. Management attributed the performance to higher gold loan growth.
• Consolidated revenue of Rs.3,356 Cr — up 10.2% YoY in Q2 FY 2026-2027.
• Standalone Mafil AUM of Rs.63,733 Cr — up 4.5% QoQ and 68.5% YoY; standalone PAT of Rs.665 Cr (up 20% QoQ, 77% YoY); standalone credit cost of 1.4% in Q2 FY 2026-2027.
• Standalone GNPA rose to 1.79% — vs 1.56% in Q1 FY 2026-2027; NNPA at 1.24%, provision coverage ratio 31.3% as of September 30, 2026.
• Interim dividend of Rs.1 per share — declared for Q2 FY 2026-2027; capital adequacy at 22.36%, consolidated net worth Rs.17,298 Cr, book value per share Rs.184.2 as of September 30, 2026.

~30% FY27 growth reaffirmed; 500-branch push on track

• FY 2026-2027 gold loan AUM growth guidance of 25-30% reaffirmed — CMD VP Nandakumar said the company expects to grow around 30% in FY 2026-2027, guidance in place since the start of the year; management cited normal seasonality (Q4 historically strongest, other quarters moderate at 5-6% QoQ).
• ~500 branch additions targeted by March 2027 — on a base of 5,375 branches; ~100 opened so far in FY 2026-2027 with another 250 in full swing and expected to open within a couple of months.
• 3.15 lakh new gold loan customers added — in Q2 FY 2026-2027, taking outstanding customers to 27.2 lakh (up 11.7% YoY); customer base grew more than 3% QoQ despite yields falling vs Q1 FY 2026-2027.
• Online gold loans at 91% of the gold loan book — enabling branch growth without adding staff and manpower reduction without affecting customer service; average LTV at 64.5% (vs 65.6% in Q1 FY 2026-2027), described by the CMD as perhaps the lowest in the industry.
• Cost of borrowing held at Q1 FY 2026-2027 levels — Group CFO Bhuvnesh Farashankar noted a couple of bps shaved despite choppy markets, but expects the Q4 FY 2026-2027 exit cost to move toward the 9% handle, an increase of ~25-30 bps, in line with Q1 FY 2026-2027 call communication.
• Leadership transition — the new CEO's recruitment is complete and he is expected to take charge from 1st January 2027; the CTO resigned due to health issues with candidates being finalized; no attrition otherwise among post-Bain Capital deal recruits.

Stage-2 at ~5% of gold AUM; overlays cushion a behavioral rise

• Stage-2 assets at ~5% of gold AUM — in Q2 FY 2026-2027, vs close to 50 bps in Q1 FY 2026-2027; gold-specific stage-2 in Q2 FY 2025-2026 was "much lower," estimated at less than 0.5%. The CFO said levels remain "much lower" than the peer group.
• Rise described as largely behavioral — driven by regulatory changes effective April (FY 2026-2027) and the launch of shorter-tenor, EMI-based products unfamiliar to customers used to one-year bullet loans; management expects normalization over Q3–Q4 FY 2026-2027 as customer contact and education increase, but declined to commit to stage-2 normalizing by end of FY 2026-2027.
• Management overlays of ~70-80 bps — embedded in the 1.79% cost reported in Q2 FY 2026-2027, explaining the sequential rise in provisions; standalone provisioning stood at Rs.220 Cr, largely gold-driven. Cumulative overlay quantum not disclosed; CFO committed to share the figure with analysts later.
• Gold loan GNPA at ~1.04% — vs overall standalone GNPA of 1.79% in Q2 FY 2026-2027; gold stage-3 at only 1%; ~Rs.14 Cr of loss on ARC sale was reclassified into provisions, described as very small.
• ~60-65% of gold loan customers pay interest promptly — despite no contractual scheduled payment being due; management sees no change in this behavior going forward.
• Product mix shift underway — 90%+ of the book remains bullet repayment; monthly/quarterly schemes are only 8-10% of incremental disbursements; management is slowly moving the mix from 3-month and 6-month toward 1-year products, retaining short-tenure only for customers with clear short-term requirements (no specific timeline given).

Ashirvad back in profit; vehicle finance still in run-down

• Ashirvad Microfinance PAT of Rs.32 Cr — in Q2 FY 2026-2027 (vs Rs.21 Cr in Q1 FY 2026-2027 and a Rs.168 Cr loss in Q2 FY 2025-2026); H1 FY 2026-2027 PAT of Rs.53 Cr vs a Rs.436 Cr loss in H1 FY 2025-2026; net NPA improved to 1.1%, CRAR at 29.2%.
• Ashirvad AUM of Rs.7,919 Cr, up 10% QoQ — MFI disbursements of Rs.1,461 Cr vs Rs.1,055 Cr in Q1 FY 2026-2027; new MFI book proportion rose to 79% vs 68% in Q1 FY 2026-2027.
• H2 FY 2026-2027 MFI growth to stay calibrated — MD & CEO Manoj Palsania said the focus is not growth and any growth must come with absolutely no compromise to underwriting; for FY 2027-2028 he expects steady growth at rates similar to Q1-Q2 FY 2026-2027, with the earlier run-down "a thing of the past".
• Vehicle finance AUM fell to Rs.2,169 Cr — down 15.3% QoQ and 46.5% YoY; GNPA worsened to 16.9% vs 13.4% in Q1 FY 2026-2027; cash disbursements paused with focus on collections, to be reassessed in FY 2027-2028.
• MSME AUM at Rs.3,361 Cr; home loan book at Rs.1,814 Cr — MSME GNPA at 6.4% (vs 5.9% in Q1 FY 2026-2027); home loans down 1.7% QoQ with Q2 FY 2026-2027 disbursements of Rs.121 Cr; both businesses prioritizing disciplined underwriting over rapid balance sheet expansion.

17-18% settlement band; no price-war participation

• Yields expected to settle around 17% in 3 years (~FY 2029-2030) — VP Nandakumar said they could even be 18% or higher, conditioned on borrowing costs, policy direction and other external factors; management affirmed 17-18% as the expected settlement band and noted top players have currently settled around 18% yields as of FY 2026-2027.
• Combined EMI and bullet gross yield of 17.5-18.5% expected — per VP Nandakumar (period unspecified).
• Price-war feedback flagged by an analyst — Sudhanshu Mishra (Phillip Capital) relayed competitor feedback that a price war has started across 5-6 states with teaser rates below 1% per month (~12-13% annualized effective); VP Nandakumar stated Manappuram is not participating, keeping rates among the lowest in the industry as a long-term customer-retention strategy.
• ROA of 3.5-4% and ROE of 15-18% reaffirmed — previously given guidance (period unspecified); management stated it will stick to these targets.
• Gold auction volume of ~Rs.100 Cr in Q2 FY 2026-2027 — with Rs.125 Cr stated for H1 FY 2026-2027; gold valued at Rs.13,526 per gram for the quarter.
• Regulatory IGGL norms addressed — VP Nandakumar said income-generating gold loans are underwritten via cash-flow assessment with employee training already done; the Group CFO noted IGGL is a very small component of the book, which remains majorly consumption loans; management expects a gradual increase in IGGL disbursements (no numeric target given).

Confident guidance, but stage-2 trajectory and competition bear watching

• Management sees a significant medium-to-long-term opportunity — from rising formalization of credit, wider digital access and growing financial awareness; outlook to be shaped by inflation, interest rates, funding costs, rural demand, commodity prices and borrowers' repayment capacity.
• OpEx efficiency expected even at 500 branches — management does not expect a material increase in employee cost as it scales to 500 branches (period unspecified), citing field-employee rationalization and the shift to online gold loans; OpEx-to-AUM and employee cost-to-AUM expected to decline (period unspecified).
• Capital and liquidity comfortable — capital adequacy of 22.3% as of September 30, 2026; liquidity described as adequate, supported by cash and liquid assets, committed unutilized bank lines and diversified funding access.
• Competition intensifying — banks and NBFCs are widening their reach; management's response is to deepen presence, expand branches and strengthen customer experience through technology and process improvements, leaning on four decades of experience managing gold price cycles.
• Gold market backdrop mixed — domestic gold prices significantly higher YoY but moderated from recent peaks and remained volatile; Indian gold demand by volume recovered sequentially in July-September but remained lower YoY, with value-term demand higher on elevated prices.
• Open items for follow-up — cumulative management overlay quantum, non-gold provisioning split, accrued interest as% of AUM, and the share of the gold loan book above 80% LTV; management committed to revert with these figures. Stage-2 normalization timing remains uncommitted given continuous rolling inflows and limited history with the new product.