Manba Finance Limited — Investor Meet, 30-01-2025: Analysts/Institutional Investor Meet/Con. Call Updates

1. Financial Performance: Manba Finance Limited reported a net interest income (NII) of INR 36.10 crore for the quarter, marking a 64% year-over-year growth, while the net interest margin (NIM) improved to 14.82%. Profit after tax soared to INR 13 crore, reflecting a 171% increase year-over-year. For the first nine months of FY25, NII reached INR 93 crore (54% YoY growth), with profit after tax at approximately INR 30 crore (39% YoY growth). The asset under management stood at INR 1,304 crore, growing 48% YoY, driven by record loan disbursements of INR 672 crore for 9M FY25.

2. Future Outlook and Growth Drivers: Management highlighted plans for significant growth through geographic expansion and diversification into new products, including three-wheelers, used cars, and small business loans. The partnership with Piaggio aims to enhance financing solutions for electric vehicles and promote entrepreneurship. They project an asset under management target of INR 1,900 to 2,000 crore for the next fiscal year.

3. Order Book and Operational Updates: Manba Finance achieved a record loan disbursement of INR 327 crore in Q3 FY25, which sets a strong foundation for further growth. The company successfully maintained a low gross non-performing asset (GNPA) ratio of 2.83% and net NPA ratio of 2.21%.

4. Analyst Q&A Insights (Detailed):

- Revenue and Profitability: Analysts sought clarity on the slower NII growth relative to AUM growth, with management attributing this to the timing of seasonality in disbursements.

- Market Position: The company commands a market share of 12-14% in mature markets and aims to increase it to 14-18%. The growth strategy includes focusing on areas with recent expansions where current market shares are as low as 2-6%.

- Operational Challenges: Management expressed confidence in controlling NPA levels, stating that secured lending remains a priority, limiting unsecured products to 5% of the portfolio.

- Capex and Capital Allocation: The capital adequacy ratio is at 31.37%, providing flexibility for aggressive growth without immediate fundraising.

- Strategic Initiatives: Management is aware of the competitive landscape, particularly around cost pressures from banks, and emphasized their quick loan processing times as a competitive edge.

5. Market or Regulatory Updates: The company received a credit rating outlook upgrade from Care Ratings, positively impacting its borrowing costs.

6. Strategic Focus Areas: Manba Finance is concentrating on maintaining high asset quality, strategic geographical presence, and operational efficiency, supported by a robust talent pool.

7. Investor Insight: Given the strong financial growth, future expansion plans, and effective risk management strategies, Manba Finance displays solid growth potential suggesting a 'buy' position for retail investors, with cautious attention to potential market volatility and competition pressures.