Magma Fincorp Q4 Net Profit Falls By 4.5% YoY

Kolkata-based non-banking financial company Magma Fincorp has posted its financial results for fourth quarter and year ended on 31 March, 2014. Company’s operating profit recorded double digit growth of 13% yoy and stood at Rs 340.8 crore in Q4FY14 as compared with Rs 301 crore in same quarter last year. The growth of operating profit was low as compared to growth in total operating income due to a sharp decrease in other income of the company and employee cost during the said quarter. Other income of the company went down by 72% to Rs 8.2 crore in Q4FY14 from Rs 30 crore in Q4FY13, while employee cost grew by 19% to Rs 72.4 crore in said quarter. 

Net Profit for the company fell by 4.5% on yearly basis to Rs 42.2 crore in Q4FY14 (after adjusting minority interest and share of associate) against Rs 44.2 crore in same period of last year. Net profit of the company dropped mainly due to increase in finance cost and share of loss in associate company. The finance cost during Q4FY14 grew by 12% to Rs 298 crore against Rs 266 crore in same period last year. Further, the share of losses in associate company and minority interest went up to Rs 3.7 crore in Q4FY14 from loss of Rs 1.4 crore in Q4FY13. 

On the other hand, Magma's board also approved raising of equity capital up to Rs 500 crore, to inflow fresh capital and further improve capital adequacy ratio. 

Coming to annualised performance, the company loan assets went up by 10% to Rs 17877 crore in FY'14 from Rs 16240 crore in FY'13. Further Net Interest Spread (NIS) grew by 89 basis points to 5.8% in FY'14, where it was 4.9% during FY'13. Moreover, net profit of the company also recorded decent growth during the year and stood at Rs 159.6 crore in FY'14, with a growth of 10% yoy over Rs 144.9 crore in immediate previous year. 

The company closed the last financial year with a capital adequacy ratio of 16.6% at the end of March, 2014. At CMP of Rs 75 per share the company is trading at 1.23x of its book value.