Manappuram Finance Ltd
NSE:MANAPPURAM
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
American Express Co
NYSE:AXP
|
Financial Services
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Target Corp
NYSE:TGT
|
Retail
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
139.5
228.32
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Estee Lauder Companies Inc
NYSE:EL
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Church & Dwight Co Inc
NYSE:CHD
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
American Express Co
NYSE:AXP
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Target Corp
NYSE:TGT
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
Mueller Industries Inc
NYSE:MLI
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
Manappuram Finance Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Manappuram Finance Limited Q3 FY '23 Earnings Conference Call hosted by Monarch Networth Capital. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Ms. Puja Ahuja from Monarch Networth Capital. Thank you, and over to you, ma'am.
Thank you, Rochelle. Good evening, everyone. We welcome you to the Q3 FY '23 Conference Call of Manappuram Finance. We are pleased to host the senior management of the company, who is represented by Mr. V. P. Nandakumar, MD and CEO; Dr. Sumitha Jayasankar, Executive Director; Ms. Bindu, CFO; Mr. B.N. Raveendrababu, MD of Asirvad Microfinance; Mr. Rajesh, CFO of Asirvad Microfinance; Mr. Kamal Parmar, Head of Vehicle Finance; Mr. Suveen, who is the CEO of Manappuram Home Finance; Mr. Bikash Mishra, CFO of Manappuram Home Finance.I now hand over the call to MD sir, Mr. Nandakumar for his opening remarks, post which we can have the floor open for Q&A. Over to you, sir.
Thank you. Good evening, ladies and gentlemen. We welcome all of you to our Q3 FY '23 conference call and wish you all a wonderful year 2023.I take great pleasure in presenting our Q3 FY '23 results amidst the prevailing climate of optimism and exuberance in the country. There's optimism about India's growth prospects is gaining traction as we mark forward. In fact, even as the world economy is bracing itself to deal with an impending recession, India continues to be an island of macroeconomic stability. The China Plus One strategy, which refers to global investors attempt to diversify the investment from China and look for alternative business destinations also spells advantage for our country.Various estimates by leading think tanks show that we are well on our way to achieve a GDP of $5 trillion in another 5 years. The spillover effect would be felt across the sectors in the days and years to come, and we are well placed to seize the opportunity. To be sure, higher interest rates across advanced economy and heightened inflation will drag down global growth prospects. India cannot be totally immune, and we are likely to take 100 bps hit in our GDP growth in FY '24, compared to that of the current fiscal. However, we will retain the fastest-growing economy tag. Our demography will be yet another advantage compared to an aging population also.India's prominent role in the global stage, including in major forum like G20, shows that it is not just our decade but also our century. The 3 years starting with 2021 can rightly be termed as a phase of survival, revival and growth as we negotiated the pandemic and reclaimed a firm growth projector.In the last con call, I had stressed there's a need for a balanced and prudent growth strategy. I'm happy to share that despite increased competition, we have recorded a net profit of INR393 crores in Q3, which is an improvement of 50.8% over the year ago quarter, driven by profitability in gold loans, and the turnaround in microfinance business.Our gold loan AUM stands at INR18,614 crores, a decline over the Q3 of the previous year, but more or less steady sequentially. Overall, the consolidated AUM has reached INR31,883 crores in Q3, representing an increase of 4.9% over the year ago quarter. The company's microfinance subsidiary, Asirvad has positive AUM of INR8,653 crores, growth of 22% year-on-year and a profit of INR70.5 crore during Q3. As the sector reaps full benefit of the ongoing loan recovery, the share of microfinance in the overall profit pie is set to go up in the days to come. Like in the previous quarter, we have seen a maximum growth in the vertical finance business, recording 40% increase year-on-year with an AUM of INR2,112 crores, followed by home loans AUM of INR1,005 crores, 23% increase over the corresponding quarter in FY '22.The strategy of diversifying into other sectors is gaining pace where this rebalancing is already reflected in the December quarter, December 2022 quarter results. We will continue to press ahead with this policy of becoming a well-diversified NBFC. For instance, in the housing finance business, we have focused on a model based on all locations with parent branches and the focus on low ticket housing loans. We have also decided to enter niche areas like financing health care professional and small hospitals with a good potential. On the corporate loan front, we have already disbursed INR500 crores. The MSME and personal loans are another area where we want to increase our presence to arise at the right mix of gold and non-gold products. For a more comprehensive review of the financial performance, I hand over the floor to our CFO, Mrs. Bindu A L.
Thank you, sir. Good evening, ladies and gentlemen, and thank you all for joining us today. Now coming to the operational overview. Our consolidated AUM for Q3 FY '23 was INR31,883 crores, representing 4.9 percentage Y-o-Y growth and 4 percentage growth sequential. Consolidated profit after tax was INR393 crores, which was up by 50.8 percentage Y-o-Y and down by 3.9 percentage Q-on-Q. ROE on a consolidated basis was 17 percentage, and ROA was 4.2 percentage for the quarter. Our leverage is currently at 2.9x.Our GNPA as on 31st December at 1.61 percentage versus 1.95 percentage during the previous quarter. Company has redeemed the USD loan, $300 million, which was due in January 2023. Cash and cash equivalents on a consolidated basis was INR4,879 crores and undrawn bank line was INR4,761 crores. Our CP exposure is made in the stand-alone entity, and our ALM is well positioned across all the buckets. Standalone borrowing cost has gone up by 59 basis points after the repo rate high cost, 225 basis points.Talking about the Golan business, which constitutes 58.4 percentage of consol AUM, whereas the remaining 41.6 percentage comprises microfinance, loan against vehicles, housing and SME finance. Gold AUM has increased by 3 percentage Q-on-Q and down by 9 percentage Y-o-Y. The yield at 22.4% against 21.9% percentage in Q2 FY '23. During the quarter, we were able to add 4.8 lakh new customers. Average ticket size at INR55,015 and the tenure average duration of 73 days. LTV at 61.5 percentage.Our stand-alone PAT was INR318 crores, up by 22.9 percentage Y-o-Y and down by 8.7 percentage Q-on-Q. The total number of gold loan customers stood at 23.7 lakh and the gold loan book at INR18,614 crores. Online gold loan continues at 47 percentage of the total gold loan book.About the microfinance business, Asirvad AUM stands at INR8,654 crores, including gold loan AUM of INR548 crores, up by 13 percentage Q-on-Q and up by 22 percentage Y-o-Y. As we are coming to the end of COVID-related provisioning cycle in Asirvad, PAT for MFI business has increased to INR70 crores in Q3 versus INR56 crores in Q2 FY '23. Expect further reduction in credit costs and return to pre-COVID levels over coming quarters.Our collection efficiency from MFI business during the quarter at 104% and disbursement towards MFI during the quarter was INR2,382 crores. Cumulative ECL provision in Asirvad is INR444 crores. Net NPA stands at 1.7 percentage. CRAR of Asirvad stands at 21.6 percentage. Vehicle Finance business reported an AUM of INR2,112 crores, which is up by 12 percentage Q-on-Q and up by 40 percentage Y-o-Y. Collection efficiency at 102 percentage. GNPA come down to 3.1 percentage from 3.6 percentage.Homeloan business, the total loan book of INR1,005 crores, which is up by 9 percentage Q-on-Q, up by 23 percentage Y-o-Y. It operates from 74 branches and reported a profit of INR2.6 crores during this quarter and was INR12 crores for the 9 months ended 31 December 2022. Collection efficiency was 100 percentage. GNPA continues at 5.4 percentage.Loan to MSME and others stands at INR1,526 crores. Collection efficiency is over 100 percentage and GNPA at 1.2 percentage. Our own lending AUM stands at INR521 crores with a disbursal of INR280 crores during the quarter. Provisions and write-offs on the stand-alone entity stood at INR9.8 crores compared to INR22 crores in Q2 FY '22. The Board has declined an interim dividend of INR0.75 during the quarter.Our capital position is strong, and the company is well capitalized with a CRAR of 32.86 percentage. Company's consolidated net worth stands at INR9,279 crores, and the book value stood at INR109.6.Thank you. We can go for the Q&A now.
[Operator Instructions] Our first question is from the line of Aviral Jain from Siguler Guff.
Yes. My question was [Technical Difficulty]
Sir, I'm sorry. There's lot of disturbance on the management line. May I reconnect you on the call, sir? One moment, please.Ladies and gentlemen, please hold for a moment while we reconnect the management.Ladies and gentlemen, the line for the management is reconnected. [Operator Instructions] We have a question from the line of Rahul Shah from Shah Associates.
Good evening, management and especially Mr. Nandakumar. My question is regarding the bread and butter of the business that is gold loan, and that is 90% of the profit. What steps are we taking to gain market share and also what are the marketing strategies? Because whenever we say its Manappuram Finance, we see other companies at the top of the Google search results and similar sense. So have you thought about changing your marketing strategy and also making the website better looking and also the apps better, the UI and the apps better?
So Rahul, a few years back, we have told the market we want to be a diversified NBFC. So our strategies are to become a diversified NBFC. That doesn't mean that we forget our gold loan product. So the other -- we are strengthening the other sectors. At the same time, we are also strengthening gold loan. But here, because of the increased competition, not only increased competition, but also the demand from our target audience was low. So it is slowly picking up. It was slow, but it is slowly picking up now with the social spending has increased, it is picking up. So there's an interim graph. That's why the gold loan portfolio suddenly declined and the yield also have declined. There's no other reason. We are not ignoring. We are strengthening both the gold loan and nongold. The results will be evident in the coming quarters. Because in the results itself, you're seeing the gold loan, which has -- the year-on-year, there is a decline. But at the same time, quarter-on-quarter, you're seeing the sort of balancing. So in the coming quarters, we expect for the gold loan also to grow along with other businesses and the profit also to improve for some more sectors starting from Q4.
Finally, regarding the changing of the user interface of the app, making it better, easier for customers to use and more appealing, if you can answer that, please?
Can you repeat the question? Because the question, we couldn't hear you.
Well, I will repeat the question. It is regarding making the app better looking and easier to use by changing the software of the app and making it more appealing for online gold loan growth, if I was able to put it better this time?
Yes, yes. So that efforts are going on to do the app as well as website. The efforts are going on. And we have taken lot of steps, and they will be published very soon.
Our next question is from the line of Abhijit Tibrewal from Motilal Oswal.
Sir, my question may sound like a continuation of the previous question, but just trying to understand this better. I mean it's a very good thing that we are now kind of looking to diversify into other product segments given the high competitive landscape. I mean I think I mean you are actually growing strongly in the non-gold businesses. But I'm just trying to understand that have we made any changes in terms of underwriting or the management team post-COVID in the non-gold product segments which should now give us higher confidence to grow strongly in the non-gold products? And also, sir, looking at the competitive landscape, I mean, given that, I mean, you talked about demand is now slowly coming back in your target customer segment, but if we kind of continue to, I mean, cater to that customer segment, which borrows gold loans, predominantly at, let's say, 20%, 22%, do you foresee that there is a risk of losing market share in your core business, which is gold loans?
So, we will answer the second part first, then I'll go to the first part. So see at 20% to 21%, our target audience is coming back. That's why even though declaring the year-on-year, you see a balancing in Q-on-Q. In the coming quarters, we will see growth may not be of that large scale, but slowly and gradually picking up from the third quarter onwards. This was also you will see growth in the coming quarters also, you will see growth. It means that our target audience, which is borrowing for a short term and also the ticket price of around INR50,000 up to INR60,000, they started coming back. You would have seen the social spending like marriages at the bottom -- social events like festivals, et cetera, they're much less in 2 quarters before, but slowly picking up. In fact, we see the weakness at the ground level that is reflecting in our business also positively.Regarding the first part of your question, yes, our underwriting is good in good in non-gold. If you look at the quality, asset quality in commercial verticals, the GNPA has come down to around 3.1%, which is good with a good figure, good quality assets. If you look at other companies assets also, our companies assets also, it is also growing at a very fast rate, even in MSME. Our GNPA is around 1%, which is the best. It is growing very fast.In affordable housing also, it is improving. We have the problem -- the problem was the selling out of the recourse of the real estate assets. So we are in the process of arriving at the deals et cetera. And in the Q4 itself, you will see a considerable reduction in the GNPA there. In microfinance, you have seen the company has come back. And in the coming quarters, we are very hopeful, very positive about excellent results on the microfinance business. So the underwriting is one of the best, and we continue to improve according to the need, continue to strengthen, not into -- strengthen in accordance with the need. So from last quarter onwards, we are very confident and we are expecting good results in all the segments, including gold.
Just a follow-up question before I ask my last question. So when we are guiding that we now expect gold loan growth to start happening from next quarter onwards gradually, maybe a modest growth to start with, it is -- I mean, assume that that can happen at the same spread in margins or [ secular ] operating without dilution in any of those matrices, let's say yields or spreads and margins?
So we are speaking to a yield of 20% to 21%, and there is no further dilution. The growth is happening at that level because as I mentioned just now, our borrowers are borrowing for 2, 3 months and also the ticket size is small. And the customer acquisition is also going in the same way. So that's a demanding reasons, but the tenure also, they're slightly increased. So the things are shaping up for good.
Okay, sir. Sir, just one last question in the interest of time. I think I mean somewhere in media or on a public forum, you had commented on succession planning that the regulator also expects that as a company we kind of lay out that succession planning. I recall in the last week of December, we had appointed Dr. Sumitha Jayasankar as an additional director, executive on the Board of the company effective from Jan 1. So I just wanted to understand, I mean, is that appointment more in the nature of a promoter coming on the Board? Or I mean, what I'm trying to understand is will she be actively involved in the business just like you are? Or going forward, the idea is that maybe we'll appoint someone as the MD and CEO to run the business? And lastly, before I kind of stop here, I mean on the dividend payout, I mean, given our capital adequacy, any expectations or any thoughts around increasing the dividend payout going ahead?
So the succession plan of the family, my daughter has been appointed as an Executive Director. She has been here a few years back. She's a medical doctor. So now she has come as a full-time director and is actively involved in the business. She has taken up the growth of nongold products to start with, vehicle finance now. And she's getting trained for succession. So the final call of succession -- of a successional MD will be taken up by the Board later. That's not now. There is time by the time I retire. So the Board will definitely find out a suitable succession. Don't worry about that.Yes, about the dividend payment, we continue with the same dividend. For the time being, we have not taken these dividends. But in the coming quarters, most probably next year, Board may consider with a much more improved performance.
Our next question is from the line of Shubhranshu Mishra from PhillipCapital.
So in terms of the SME lending and own lending, what is the yield that we are seeing on this book? And we were in this business before. And then after the crisis as well, we tried to scale it up. Again, we retracted from this business. So what has led to the change of thoughts that we are entering this business again, and we are getting such high disbursement? That's the first question, sir. Second is that we have seen a tonnage decline in this quarter in the gold loans. So how do we look at the gold loan growth? What is your guidance for tonnage growth as well as loan growth? Also, if you can split the AUM into less than 1 lakh as a percentage of the AUM, 1 lakh to 2 lakh as a percentage of AUM and more than 2 lakh as a percentage of AUM as of third quarter? And if we can speak on balance transfers out to banks and other NBFCs and if we can speak of competitive intensity?
So first I understand is regarding lending to NBFCs.
Lending to NBFC and SME lending, both, sir.
So SME lending is going towards micro factors, where the average ticket size is around INR6 lakhs. It is mostly of security of mortgages. So there we are lending around INR150 crores, INR160 crores now per month and growing at a rate of INR100 crores per month, micro lending, micro enterprises, mostly secured with mortgages. There this is increasing, month on month those disbursals are increasing and the quality also, as I already mentioned about, a GNPA of 1.1 percentage without any write-offs. In the NBFC lending, we are lending to the different sectors of NBFCs, where our average yield is around 13.3%. We have been in that business prior to COVID. And post-COVID, we have restarted this business. But the portfolio was almost wound down to nil during this COVID period. And we have excellent experience. We are granting these loans to -- we have an assessment team. The team assesses the quality of the promoter, which is the credit rating and the mode, et cetera, et cetera. Only after the underwriting that and found to be a good company, we are lending to them. And we have a good experience. Whatever we have learned, we continue with that experience.About the 1 to 2 lakh tickets, so the details will be shared by the CFO and balance answer also in that -- those loans also will be shared.
So what is the ticket size of the own lending to NBFC, what kind of checks are relating to them?
Average ticket size to NBFC is INR12 crores and maximum is INR30 crores.
On the gold loan, up to INR1 lakh, that is 44%; INR1 lakh to INR2 lakh, 23%; INR2 lakh to INR3 lakh, 10%; INR3 lakh to INR5, 8%; and above INR5 lakh is 15%.
Can you repeat that, sir, it was a bit muffled?
Up to INR1 lakh, 44%; INR1 lakh to INR2 lakh, 23%; INR2 lakh to INR3 lakh, 10%; INR3 lakh to INR5, 8%; and above INR5 lakh 15%.
And if you can speak on the tonnage growth and the AUM growth going forward?
The tonnage growth, see, the tonnage growth has [Indiscernible]. See, the people borrow based on their need only. And you see the average redemption period is around within 2.5 months. They are very much more than above the cash flow because they intend to redeem within a short period of time. So like unsecured loans or other loans, they don't borrow indiscriminately. When the gold price goes up, the tonnage comes down. When gold price goes down, automatically the tonnage goes up. So in this business, gold loan business, the tonnage is often asked, but I don't see -- I don't find any significance. Anyway, that will be shared with you.
Mr. Mishra?
One question still remains unanswered about the competitive intensity and balance transfer to banks and NBFCs.
In gold loan, we don't track what is the exact transfer to banks, NBFCs, et cetera. Because the SMEs are short term, what we see is most of these have taken back by our own customers.
Our next question is from the line of Manoj Oberoi from YES Securities.
This is Rajiv here. Sir, firstly, the question is on the MFI portfolio. So while mam has given the full ECL provisioning number of INR444 crores, can we get the ECL coverage on Stage 2 and Stage 3 assets out there?
Yes. So on Stage 3, based on the data, our LGD stands at 67 percentage. And on Stage 2, it is around 15%, 14.5%.
So that is a provision on those buckets you're already holding, right?
So that is the coverage also.
Coverage also, yes. Okay.
[ Percentage, 1.7%. ]
Correct. Correct. And, ma'am, what has been the collection experience in the recent quarter on Stage 2 loans and Stage 3 loans? So what has been the collection efficiencies?
So month-on-month, the overall collection efficiency is improving. So this quarter, it is around 104 percentage. That book also post-COVID disbursement is increasing. So that is also helping us to improve the collection efficiency. And on the Stage 3 collections based on the data is around 37%. So that is 33%. So that is the reason for LGD of 67 percentage.
Got it. And Stage 2 collection efficiency will be around 85% there, the reverse of the ECL coverage?
Yes.
Okay. And coming to gold loans, you said that the new customers acquired in the quarter were about 4.8 lakhs. What is this -- so how should we look at this run rate versus pre-COVID? Was the peak cohort run rate much higher than this run rate, while it might be improving quarter-on-quarter right now, but versus pre-COVID?
Better now. It is better now.
It is better?
For 2 quarters it is better. It is getting better than that of pre-COVID nowadays.
Okay. And in this incremental customer acquisition of 4.8 lakhs, what is the ticket size breakup? Or maybe what is the proportion of loans, customers taking loans below INR1 lakh?
See, if you look at the percentage, there is INR1 lakhs to INR2 lakhs, INR2 lakhs to INR3 lakhs, et cetera. It is -- there is no much change as of now. But going forward, we expect below INR1 lakh to improve. It is slowly improving. So we'll be able to share the improvement in the last quarter. It is improved slowly.
Okay. Okay. So you are seeing both at the portfolio as well as at the incremental level, less than INR1 lakh portfolio is seeing faster growth?
Yes. So lower end of the segment, that share is slowly increasing. We hope that there will be improvement during the last quarter.
Our next question is from the line of Pratik Kothari from Unique Portfolio Managers.
So the low-yielding book less than 12%, I believe our intent will be to run this down to 0%, right, eventually?
Low-yielding products that, first of all, it is not that yielding now. We have increased that to some extent. We have increased pace by 3, 4 percentage there. But that's why the yield is somewhere around 20, 21 percentage.
My quick question was on Slide 18. You have mentioned that 17% of our AUM comes from below 12% yield, which used to be 0 in FY '21 --
Rightly pointed out. So our teaser rate schemes, which was around 7 percentage, schemes, et cetera, that was stopped. That is 0 now. That is what like we used to discuss on the teaser rate product. Within the portfolio, 17 percentage is below 12 percentage yield. That is as part of gold loan schemes, this is there for many years. The people who are very sensitive to interest rate, there -- lower LTV, we will be offering these kind of products.
Okay, fine. And, ma'am, in the presentation for Q2, we have mentioned that 18% of the book was below 12%. But I think last quarter, it was mentioned 25%.
Yes. So this 12 percentage, if you see, last time, it was less than 12% and greater than 12%. So last time that 12 percentage was clubbed with less than 12%. That is the reason this time we have modified greater than 12% -- greater than and equal 12%.
And sir, on the gold loan, again, I think overall level in pre-COVID et cetera, we used to do -- and considering the exceptional times we saw in between, we used to do 5%, 6% -- 5%, 5.5% ROAs, we are at about 4.5% right now. I mean is growth the only lever to reach there? Or what else do we have?
Gold loan ROA?
Gold loan, yes.
The gold loan ROA is in that 6 percentage. So the overall ROA of standalone bookings is 4.6% --
4.2%
4.2 percentage consol.
Standalone is 5.2%.
5.2%, and consol is 4.2%. It's a decent ROA.
Sir, if you look at standalone results for Q3, our ROA is 4.4%. It used to be [ prior, 6.3% ].
Stand-alone includes vehicle finance, MSME and this own lending to other NBFC. So -- but the gold loan portfolio alone, we are taking the segmental profitability. In that, gold loan ROA is around 6 percentage.
So we are back to what it used to be earlier?
Yes. That is -- earlier it was 8 percentage, because our yields used to be -- yield used to be around 24 percentage. So it was high, but still we are earning 6 percentage ROA.
Okay. And, ma'am, auction numbers for this quarter?
Auction, INR353 crores during the quarter.
Our next question is from the line of Rishikesh Oza from RoboCapital.
First question, if you can guide on the growth rate, gold business and also for the non-gold business?
So our target is to achieve consol growth of 20% per annum. So that is our target. So we are gradually reaching that level of proper growth of 20% gradually in the consol.
And how much would be from [ margins from nongold ]?
So this is a consol one. So segmental, there could be some variance, et cetera, et cetera. Overall, our target, as I have been telling for a long time, our consol target is a CAGR of 20% as well as an ROE of 20%. So we have not reached an ROE of 20%, but gradually quarter-on-quarter, we hope that there will be improvement and steadily we will reach that level of 20% ROE in the next few quarters.
Okay. And sir, banks are offering gold loans at 12%. Do you expect pressure on your yield?
This was done even during pre-COVID level to poor people who are borrowing a very low amount, et cetera, INR5,000, INR10,000 et cetera. This has been done for a long time. And that will not -- but still our -- this is a very small percent of the portfolio. We'll maintain our yield at around 21%.
Our next question is from the line of Sanket Chheda from DAM Capital.
Yes, sir, [Technical Difficulty] net debt, but what guidance did we give on the growth, particularly on the book and then on the overall book?
What is the question?
Can you repeat?
Yes, I wanted to know our growth guidance for FY '24 on overall book and particularly in case of gold loan, do we expect some growth to start kicking in from next quarter or maybe we will look for FY '24 in terms of AUM growth in gold and next quarter would still be flattish on gold?
See, the exact guidance, segmental guidance, et cetera, we can't give. But this is the target, 20% CAGR and 20% ROE. So in ROE, we are lagging behind that reaching that level is what I have said. Now from the present level of ROE, quarter-on-quarter you can witness improvement and a few quarters now, we will be able to meet both a CAGR of 20% as well as ROE of 20%, which is our plan is, which we have been doing pre-COVID. COVID had its challenges. Now it is evident that we have come back. And in the coming quarters, we are really hopeful about achieving this.
Okay. Sure, sir. And anything on the opening incremental branches for gold loans, any approval that we have received?>
Which one?
Are we planning to open incremental branches for the gold loan business?
See, we have currently around -- nearly 4,000 gold loan branches now. Every quarter, our consolidated gold loan branches are increasing by around 100, [ 200 ], quarterly. This is being done.
Our next question is from the line of Neha Kshirsagar from KRChoksey.
My question is on the net interest margin. So considering the increase in cost of borrowings and even in this quarter, the consolidated cost of borrowings were up by 40 basis. So can you just give a guidance, where do you see the margins going ahead?
I hope the net interest margin would remain somewhere in the present range. In the last quarter, we have renewed the high cost borrowing of $300 -- $300 million bonds. So that has brought down. And as some of the high cost borrowings are redeemed, there may not be much change. And even if there is a minor change in the borrowing cost, we hope that could be passed on. The new would remain more or less at the same range.
And any guidance on the contribution from gold finance business to maybe in terms of how much do you expect at a consolidated level?
See, the gold loan, 5 year, 6 years time itself, we have told that we want to be a diversified company. So we want to maintain a minimum of 50% share of the consolidated AUM as gold loan. So we are 58%. And in another 2 years, we hope it will be more or less 50% is what we have planned 5, 6 years back.
[Operator Instructions] Our next question is from the line of Pradeep Agarwal from Systematix.
My question pertains to the Asirvad gold loan branches. So if you can quantify what would be the AUM we have booked under Asirvad in gold loan?
INR8,600 crores.
Gold loan, INR550 crores.
Yes. Gold loan is INR550 crores, and the balance is the parents.
Balance is the?
Balance is the parent company, Manappuram.
Okay. And sir, also, we have talked about getting MFI listed down the line. So if you can share what are your thoughts at this point in time in terms of listing, having a separate listing or value unlocking in MFI?
Yes. Eventually it'll be listed. according to the requirement of its capital. And so now the company has a capital adequacy of around 51%. So we will maintain at a rate of around 20% capital adequacy. And when the market situation improves, we plan to raise capital. Need not be through the listing, reasonable valuation. We may also raise private equity. And then 1 or 2 years the company may get listed. When is it going to be listed, we have not planned anything as of now.
Okay. Also, while we have been talking about balance transfer to banks for the last 1 to 1.5 years. So are we also witnessing any reverse cases where customers who have moved to banks are getting the cases again, transferred to NBFCs because of inferior experience over there?
Yes, that will also be happening. But as such, we are not tracking that seriously, but there are cases this customer shifting the gold loan from bank to here also.
See, the advantage of banks is something and the advantage of NBFC is something. So both have advantages and disadvantages. Our customers are borrowing for a shorter term of around 3 months, 4 months, et cetera, and on an average ticket size of INR50,000, INR60,000, where they want that money very fast, they don't want to lose their time making at the bank, at the account of the lender. They wat money in 10 minutes, 15 minutes and redeem also at a proper -- within a shorter time, say, 10, 15 minutes, so this -- whereby they don't lose their day. So such customers continue coming to us, and that is our target audience. They are mostly from the lower middle class. And their borrowing was less purposeful. It is -- we see with the activities, we have seen economic activities increasing and their social spending increasing, the demand is picking up. So that will cater to our requirement of growth in gold loan.
Okay. Okay. Also, one data getting question. In the presentation, the number of gold customers at one place is 2.4 million, where you had close is 2.3 million, and there was a difference in previous quarters as well. So if you can highlight, is this because of Asirvad number included in some place? Which would be the right number, 2.4 million or 2.3 million?
Including the Asirvad, 2.4 million.
2.4 million including Asirvad.
Our next question is from the line of Bhuvnesh Garg from Investec Capital.
My question is on gold loan outlook. So with the gold prices hovering above INR55,000, level for last 1 month. So what kind of demand we are looking at? And if you can quantify like the demand in November, December is what we are seeing in January, and what kind of loan growth you are targeting in Q4?
So the borrowing is not based on the gold price. As I mentioned earlier, the borrowing is based on their needs. When these customers borrow, they borrow at a rate whereby they can renew within a shorter period of time. So they will not borrow indiscriminately from whichever sources they will get, unlike other loans, they won't borrow. So even with the gold prices increasing, there won't be much impact as far as the growth in gold loan business is concerned. The growth will be driven by the demand of money.
Thank you. Ladies and gentlemen, we take that as the last question. I now hand the conference over to the management for closing comments.
So thank you. So what we want to communicate, our intention is to be a well-diversified company. Our strategy in the diversification will continue. That doesn't mean that we, you know, the gold loan. It will also be expanded because of demanding reasons. So thank you for participating, all the questions. The questions were good. We hope that we answered the questions to the satisfaction to friends who are following this discussion. Thank you.
Thank you.
Thank you very much, members of the management team. Ladies and gentlemen, on behalf of Monarch Networth Capital, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.