Manappuram Finance reported a sharp improvement in its financial performance for the second quarter of FY27, with consolidated net profit rising more than threefold to ₹701 crore, supported by strong growth in its gold loan business. The Kerala-based non-banking financial company (NBFC) had reported a consolidated profit after tax of ₹217.31 crore in the corresponding quarter last year.
The company’s profit also improved sequentially, increasing 20% from ₹584.77 crore in the June quarter. Consolidated revenue from operations rose 46.2% year-on-year to ₹3,356 crore in the September quarter, compared with ₹2,296 crore in the same period last financial year.
Total income stood at ₹3,312 crore, against ₹2,275 crore a year earlier, reflecting the company’s expanding lending operations and stronger contribution from its core gold financing business.
The latest results underline the growing importance of gold loans in Manappuram Finance’s overall business. Its consolidated assets under management (AUM) increased 60.1% year-on-year to ₹73,303 crore as of September 2026, compared with ₹45,789 crore in the corresponding period last year.
Gold loan AUM was the biggest contributor to this expansion, climbing 92.5% to ₹60,640 crore from ₹31,505 crore a year ago. The gold loan portfolio accounted for approximately 83% of the company’s consolidated AUM, making it the principal driver of its earnings growth.
The company’s standalone performance also remained strong. Standalone profit after tax increased 77% year-on-year to ₹665 crore, while standalone AUM grew 68.5% to ₹63,733 crore.
Customer additions provided another indication of the momentum in the gold loan segment. Manappuram Finance’s gold loan customer base reached 27.2 lakh, registering an 11.7% increase from the previous year. The company added around 3.15 lakh new customers during the September quarter.
During its post-results earnings call, the management maintained a positive outlook for the gold loan business, reiterating its full-year FY27 growth expectation of 25-30%. Chairman and Managing Director V.P. Nandakumar indicated that the company remained confident of achieving approximately 30% growth in gold loan AUM during the financial year.
The company is also working to strengthen its physical distribution network. It plans to add around 500 branches by March 2027, with nearly 100 branches already opened during the first half of the financial year. Management said another 250 branches were in various stages of development.
Technology-led expansion is expected to help control operating expenses despite the planned increase in branches. Around 91% of the company’s gold loan business is conducted online, allowing it to expand its customer base without proportionately increasing manpower requirements.
However, the strong earnings performance has also brought certain concerns into focus, particularly asset quality and the possibility of higher borrowing costs.
One of the important issues discussed during the earnings call was the increase in Stage 2 gold loan assets. These loans accounted for around 5% of gold loan AUM, compared with approximately 0.5% in the previous quarter.
Management attributed much of the increase to changes in customer repayment behaviour following the introduction of shorter-tenure and EMI-based gold loan products. Traditionally, many borrowers were accustomed to bullet repayment loans, where the principal and interest are generally settled at the end of the loan period.
The company said customers were still adjusting to the newer repayment structures. It added that early collection trends were encouraging, with several borrowers returning to regularise overdue payments. Management expects the situation to improve over the next few quarters, while continuing to monitor potential stress in the portfolio.
The company’s average loan-to-value (LTV) ratio remained around 65%, which management described as relatively conservative. Gold loan gross non-performing assets stood at approximately 1.04%, while overall gross NPA was 1.79%.
Another factor investors will watch is the cost of borrowing. Management indicated that funding costs could increase by 25-30 basis points towards the end of FY27, potentially putting some pressure on lending margins. The company expects gold loan gross yields to remain in the 17.5-18.5% range.
The performance of its non-gold businesses was mixed. Asirvad Microfinance reported a turnaround, with profit before other comprehensive income reaching ₹32 crore against a loss in the year-ago period. However, the microfinance business continues to follow a cautious approach, focusing on collections and improving portfolio quality. Vehicle finance operations remain in the process of being wound down, while MSME and housing finance businesses continue to expand at a measured pace.
Brokerage views following the results have also highlighted both the company’s growth potential and the risks surrounding its lending operations.
Motilal Oswal maintained a Neutral rating on Manappuram Finance with a target price of ₹360 in its November 13 research report. The brokerage noted that consolidated profit rose approximately 220% year-on-year and 20% sequentially, while net interest income increased around 42% year-on-year.
The brokerage also pointed to higher credit costs, which stood at approximately ₹290 crore against its estimate of ₹200 crore. Annualised credit costs increased to 1.6% from 1.35% in the previous quarter. Despite raising its FY27 and FY28 earnings-per-share estimates by around 10% and 5%, respectively, it retained its Neutral recommendation.
The latest results place Manappuram Finance in a stronger earnings position, backed by rapid expansion in gold lending and rising customer additions. However, the company’s ability to manage asset quality, contain funding costs and sustain growth amid increasing competition in the gold loan market will remain important factors for investors in the coming quarters.