Magma Fincorp Sees Higher Revenues & Profits In Q1
Suparna / 20 Jul 2013
The revenues have gone up by an impressive 49%, while the profits too jumped by over 40%. On the flip side, some stress was seen on its margins and its asset quality also took a hit.
In its results for Q1FY14, Non-banking Financial Company Magma Fincorp notched up an impressive revenue growth of 49% on a yearly basis, which stood at Rs 485.20 crore for the quarter against that of Rs 325.24 crore in the same quarter last year.
The company’s is mainly into the business of financing for various purposes. The Finance and Mortgage segment, its main revenue generating vertical, has grown by 46.03% for the quarter on a yearly basis, while its other businesses grew by 13.81% in the same duration. The loan book of the company has jumped by 28% and stood at Rs 16274 crore from Rs 12728 crore in Q1FY13. Moreover, it has recently started three new business including gold loans and general insurance, which are expected to do well.
The EBIT from Finance and Mortgage has moved up by 38.05% and stood at Rs 65.52 crore, and the profits from the other businesses grew by 18.18% to Rs 1.17 crore. The overall net profit of the company has increased by 40.77% to Rs 43.72 crore from Rs 31.05 crore on a yearly basis.
The EBITDA margins during the quarter remained almost flat, coming in at 67.81% against 67.45% in the corresponding quarter last fiscal. The PBIT margin for the Finance and Mortgage segment declined by 12.87% against the earlier 13.64%. On the other hand, its Other Businesses registered marginal growth of 25.83% against 24.87% last year.
The Non Performing Assets and bad debt of the company has increased surprisingly by over three times from Rs 11.70 crore in the last fiscal to Rs 36.09 crore this year. Moreover, the financing cost of the company has increased by 52.18% in comparison with that in the previous year same quarter. The Net Interest Margin for the entire loan book has gone up to 5.54% in Q1FY14 from 4.38% for Q4FY13.
Lack of fresh activity in infrastructure and mining in the economy has delayed interest payment from the company’s existing customers. Moreover, a decline seen in the construction industry, as well as a drop in the sales of commercial, passenger and utility vehicles has also impacted its business. The company has been trying to meet the challenge by stepping up its investments and diversification through various business segments.
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