Magma Fincorp disbursals up 50%

Kolkata, Jan 16 (IBNS) Leading asset finance company Magma Fincorp Limited announced the Q3, FY12 results on Monday that reflected growth in business disbursals and Assets under Management (AUM) over corresponding quarter of the last year.

The disbursements grew at 50% to Rs 1915 Cr, riding high on the performances across product categories.

Total Assets on Finance in the books of the company has recorded an impressive increase of 77% since the company has reduced its dependence on securitization and is funding the assets from its capital and debt.

The company's Assets under Management stood at Rs 11856 Cr as on 31st Dec 2011.

The company has maintained healthy CRAR of 20.3% as on 31st Dec, 2011 despite such growth in Assets on Finance against the mandatory 15% prescribed by the RBI.

In spite of 77% growth in business of High Yield Products in the 9M, the portfolio quality is maintained and is reflected in Collection Efficiency consistently being above 100% and Write offs at 0.22% - lower than FY 11.

Inspite of repeated increase in the policy rates, the overall spread has been maintained at 4.3% for the 9M resulting in the overall income of the company increasing by 23% to Rs 278.22 crore compared to the corresponding period of the last fiscal.

The company recorded Profit before Tax (PBT) of Rs 20.57 crore and Profit after Tax (PAT) of Rs 13.90 crore in Q3 after an impact of Rs 5 crores as a consequence of a MTM loss on forex exposure.

If the company were to follow the same biz strategy and accounting policy on securitization/ assignment as was done during the previous year, the proforma PAT would have been Rs ~115 crores for the 9M.

Sanjay Chamria, Vice Chairman and Managing Director, Magma Fincorp Limited said, "The disbursements for the quarter witnessed an encouraging growth of 50%. Our portfolio quality has been robust with Collection performance recorded at 100.4% for the Q3 FY12 and Write offs remaining below FY11 levels at 0.22% to the AUM.

"We have been able to improve the share of high yield products in the overall disbursement to 25%."

The company recorded strong growth in Car, Suvidha (Refinance) and Tractor Finance during the quarter under review compared to the corresponding period last year. While Car finance grew by 82%, Tractor and Suvidha grew by 88% and 109% respectively during this period. The company has also grown its market share quite significantly in cars, tractors and suvidha during the period under review.

"As the Q4 normally contributes 40% of the annual volume, we are hopeful of delivering on our guidance of 50% growth in disbursement for the year. We have opened 25 new branches during the past two quarters which is also expected to contribute in the last quarter," said Chamria.

The company has decided to start Gold Loan business and Affordable Housing finance business in FY13 for which the team is being set up. The new businesses will commence from April 1.