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M&M FS announced a strong quarter with net profit of
Rs1bn, growing 38% yoy. Loan and disbursement
growth remained strong. NIM declined yoy and qoq due
to change in loan mix, higher borrowing cost and
interest reversal due to higher qoq NPLs, which is a
seasonal feature in 1Q.
Staff expenses rose sharply at 11% qoq and 42% yoy.
The company paid a higher performance bonus of
Rs30m for last year’s high disbursements in the quarter.
Excluding this the qoq growth in staff cost is lower at
4%. MMFSL also announced salary hike of 10% in April.
We maintain our rating and earnings estimates.
Strong volume growth and lower spread.
Disbursements grew 34% yoy. AUMs grew strongly at
40% yoy and 5% qoq. Gross NIM (including
securitisation) fell to 10% in 1Q FY12 from 12% for
FY11, 12.7% for 4Q FY11 and 11.1% in 1Q FY11. Loan
yield remained stable yoy at 16.5% despite the hike in
lending rates due to the yoy change in loan mix with low
yielding CVs now forming 10% of total loans against 7%
in 1Q FY11 and contribution of the higher yielding UVs
declining from 34% in 1Q FY11 to 30% in 1Q FY12. On a
qoq basis, loan yield declined from 18.6% in 4Q to 16.5%
in 1Q FY12 qoq despite rise in lending rates due to
higher proportion of relatively lower yielding CVs that
increased from 7% in 4Q FY11 to 10% in 1Q FY12 and
due to income reversal on NPLs. Gross NPLs rose 23%
qoq and declined 5% yoy. Increase in NPLs in 1Q is
seasonal.
The company did not do any fresh securitisation during
the quarter due to regulatory uncertainty, which is why
income from securitisation declined to Rs50m in 1Q
FY12 from Rs156m in 1Q FY11 and Rs230m in 4Q
FY11. Staff costs rose 42% yoy and 11% qoq. The bank
added 12 branches and 200 employees during the
quarter. The company paid a higher performance bonus
of Rs30m for last year’s high disbursements during the
quarter. Excluding this the qoq growth in staff cost is
lower at 4%. MMFSL also announced salary hike of 10%
in April, which is included in staff cost for the quarter. In
borrowings, proportion of securitisation reduced from
17% in March 2011 to 14% in June 2011.
We maintain our earnings and price target.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
M&M FS announced a strong quarter with net profit of
Rs1bn, growing 38% yoy. Loan and disbursement
growth remained strong. NIM declined yoy and qoq due
to change in loan mix, higher borrowing cost and
interest reversal due to higher qoq NPLs, which is a
seasonal feature in 1Q.
Staff expenses rose sharply at 11% qoq and 42% yoy.
The company paid a higher performance bonus of
Rs30m for last year’s high disbursements in the quarter.
Excluding this the qoq growth in staff cost is lower at
4%. MMFSL also announced salary hike of 10% in April.
We maintain our rating and earnings estimates.
Strong volume growth and lower spread.
Disbursements grew 34% yoy. AUMs grew strongly at
40% yoy and 5% qoq. Gross NIM (including
securitisation) fell to 10% in 1Q FY12 from 12% for
FY11, 12.7% for 4Q FY11 and 11.1% in 1Q FY11. Loan
yield remained stable yoy at 16.5% despite the hike in
lending rates due to the yoy change in loan mix with low
yielding CVs now forming 10% of total loans against 7%
in 1Q FY11 and contribution of the higher yielding UVs
declining from 34% in 1Q FY11 to 30% in 1Q FY12. On a
qoq basis, loan yield declined from 18.6% in 4Q to 16.5%
in 1Q FY12 qoq despite rise in lending rates due to
higher proportion of relatively lower yielding CVs that
increased from 7% in 4Q FY11 to 10% in 1Q FY12 and
due to income reversal on NPLs. Gross NPLs rose 23%
qoq and declined 5% yoy. Increase in NPLs in 1Q is
seasonal.
The company did not do any fresh securitisation during
the quarter due to regulatory uncertainty, which is why
income from securitisation declined to Rs50m in 1Q
FY12 from Rs156m in 1Q FY11 and Rs230m in 4Q
FY11. Staff costs rose 42% yoy and 11% qoq. The bank
added 12 branches and 200 employees during the
quarter. The company paid a higher performance bonus
of Rs30m for last year’s high disbursements during the
quarter. Excluding this the qoq growth in staff cost is
lower at 4%. MMFSL also announced salary hike of 10%
in April, which is included in staff cost for the quarter. In
borrowings, proportion of securitisation reduced from
17% in March 2011 to 14% in June 2011.
We maintain our earnings and price target.
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