Leading asset finance company, Magma Fincorp Limited announced the Q4 and FY12 audited results today that reflected strong growth in Loan disbursals and Assets under Management (AUM) over corresponding periods of the previous year. While the Q4 disbursement grew 28% to record Rs 25.09bn, the FY12 disbursement was recorded at Rs 74.04bn – up 37% over FY11.
Total AUM of the company has grown to Rs 13293 Crore as on 31st March 2012, an impressive increase of 22% over 31st Mar 2011. The company has maintained healthy CRAR of 21.2% as on 31st March, 2012 against the mandatory 15% prescribed by the RBI.
The company recorded strong growth in Car, Suvidha (Used CV) and Tractor Finance during the year and all three products reached new high with Car finance growing by 70%, Tractor and Suvidha by 76% and 97% respectively for the year.
Inspite of repeated increase in the policy rates, the overall spread has been maintained at 4.3% for the year resulting in the overall income of the company increasing by 22% to Rs 1063 crore compared to the previous fiscal.
The company recorded Profit before Tax (PBT) of Rs 275.3mn and Profit after Tax (PAT) of Rs 254.8mn in Q4 and Rs 777.9mn (PAT) for the year.
In view of the change in business strategy from the beginning of the year, Magma has used securitization as an effective treasury tool unlike the previous years when it was more a funding strategy. Acting prudently, it had also, at the beginning of FY12 altered its accounting policy on recognition of gain on securitization/assignment and now accrues the income and expenses over the tenure of the loan contracts as opposed to the upfront recognition of income. As a result of the above changes, the profits of the company for the quarter and the year ended 31st March, 2012 is not comparable with the previous year even though on a proforma basis, a like to like comparison would have resulted in PAT being Rs 155 crores against Rs 77.79 crores as reported.
Commenting on the company’s performance, Sanjay Chamria, Vice Chairman and Managing Director, Magma Fincorp Limited said, “We have exhibited a strong 37% growth in our disbursements, despite sluggish industry growth, increase in the interest rates and rise in fuel costs. Our portfolio quality has been robust with Collection performance recorded at 100.5 % for FY12 and Write offs remaining below FY11 levels at 0.20% to the AUM. Eventhough as a consequence of the changes in our accounting policy our PAT for FY12 is Rs. 78 Cr, on a like to like basis our PAT will be Rs. 155 Cr. ”
“FY13 will be a year of reckoning for Magma as the company is confident of reaping benefits from the various initiatives it undertook in FY12. We will drive our business with a view to increase disbursement by 50% over FY12 in the current year. We will also be launching – Loan against Jewellery and Affordable Housing Finance during FY13 which will also contribute to the overall business.” added Mr Chamria.