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AHMEDABAD, India, Aug. 14, 2021 /PRNewswire/ —
Consolidated AUM at ₹ 785 Crores
Net Total Income at ₹ 30 Crores; up 10% YoY
Pre-Provision Operating Profit at ₹ 18 Crores; up 6% YoY
Arman Financial Services Ltd (Arman), a Gujarat based non-banking financial company (NBFC), with interests in microfinance, two-wheelers, and micro-enterprise (MSME) loans, announced its financial results for the quarter and year ended 30th June 2021.
Particulars (In ₹ Crores) |
Q1 FY22 |
Q1 FY21 |
YoY% |
FY21 |
FY20 |
YoY% |
Assets Under Management (AUM) |
784.8 |
823.1 |
-5% |
814.4 |
859.1 |
-5% |
Total Disbursement |
121.6 |
– |
– |
509.7 |
873.6 |
-42% |
Gross Total Income |
49.7 |
49.0 |
1% |
193.3 |
215.2 |
-10% |
Pre-Provisioning Operating Profit |
17.9 |
16.9 |
6% |
66.4 |
73.8 |
-10% |
Total Provisioning & Write-Offs |
11.3 |
10.2 |
11% |
54.6 |
20.0 |
173% |
Profit After Tax |
3.6 |
5.3 |
-33% |
10.6 |
41.5 |
-74% |
GNPA % |
5.68% |
1.13% |
455bps |
4.58% |
1.05% |
353bps |
NNPA % |
1.43% |
0.22% |
122bps |
0.63% |
0.20% |
43bps |
RoE* % |
7.60%* |
11.60%* |
-372bps |
5.91% |
28.80% |
– |
*No.s annualized
Consolidated Financial Highlights – Q1 FY2022
Update on Collections Efficiency
Business Segment |
Apr 2021 |
May 2021 |
June 2021 |
July 2021 |
Microfinance |
87% |
75% |
88% |
89% |
MSME |
89% |
87% |
90% |
94% |
Two-Wheeler |
94% |
95% |
93% |
95% |
Total Collection Efficiency % |
88% |
78% |
89% |
90% |
Collections in microfinance business which was impacted in May 2021 due to second wave has recovered sharply.
Update on Liquidity
Pick-up in collections along with the incremental debt capital raised has materially improved the company’s liquidity position. The company has duly repaid all the debt obligations that were due in Q1 FY22. The Company’s liquidity position remains strong with ₹ 103.4 crore in cash/bank balance, liquid investments, and undrawn CC limits. ALM continues to remain positive, and the company continue to have access to new sources of funds.
Commenting on the company’s performance in Q1 FY22, Mr. Jayendra Patel, Vice Chairman & Managing Director, Arman Financial Services said, “Q1 FY22 started off on a challenging note for the finance industry as a whole due to second wave of pandemic and subsequent localised lockdowns across geographies. It had a severe impact on the semi urban and rural market where the company has its major operations. With restrictions on movements, many customer’s earnings were temporarily impacted, which in turn affected their ability to service their EMIs. Many customers and family members were also infected, which resulted in both financial and health related strain. In addition, it was difficult to access customers to collect EMIs in areas with strict lock-downs. That said, the rural customers have proven themselves time and again of having the ability to bounce back quickly.
During Q1 FY22, Arman decided to momentarily shift focus from growth to collections and employees/customers’ wellbeing. The company’s collection efficiency, after a dip in month of May, bounced back quickly in June. As on date, there is decent recovery in collection efficiency with 90% repayment rate for the month of July 21.
Asset quality continues to remain steady with Net NPA at about 1.43%. The company enjoys adequate liquidity and a strong balance sheet position, which makes it well-positioned and agile to achieve growth over the medium to long term. The company’s liquidity position remains strong with ₹ 103.4 crore
To lend a helping hand to the customers, the company provided repayment holiday between 1 to 3 months to Level 1 standard customers as on March 21‘ in the Microfinance loan book under the RBI Resolution Framework 2.0. These customers’ tenure was pushed forward by 1 to 3 months. Approximately 70,000 customers were eligible for the scheme, with approximately 40% of them with 1 EMI deffered, and 30% each with 2 EMIs and 3 EMIs, respectively. There was no payment holidays or restructuring provided for MSME or Two-Wheeler customers.
While it is difficult to predict how the covid situation pans out over the coming months, the time taken to come back has reduced drastically and this time, the pace of recovery will be much stronger than last year as the company is better prepared. The past learnings, experienced management team and strong balance sheet positions the company to successfully navigate its way and emerge stronger.”
Segmental Performance Update – Q1 FY22 v/s. Q1 FY21 |
||||||
Microfinance – Financial Highlights |
||||||
Particulars (In ₹ Crores) |
Q1 FY22 |
Q1 FY21 |
YoY% |
FY21 |
FY20 |
YoY% |
Assets Under Management (AUM) |
630.7 |
605.1 |
4% |
643.1 |
620.7 |
4% |
Total Disbursement |
98.5 |
– |
– |
417.6 |
653.1 |
-36% |
Gross Total Income |
36.7 |
32.9 |
12% |
134.0 |
148.4 |
-10% |
Pre-Provisioning Operating Profit |
11.8 |
9.1 |
30% |
41.3 |
46.2 |
-11% |
Total Provisioning & Write-Offs |
7.6 |
5.8 |
31% |
36.7 |
13.3 |
175% |
Profit After Tax |
2.2 |
2.7 |
-17% |
4.9 |
25.2 |
-81% |
GNPA % |
4.46% |
0.95% |
352bps |
4.13% |
0.94% |
319bps |
NNPA % |
0.99% |
0.02% |
96bps |
0.57% |
0.00% |
57bps |
RoE* % |
7.26%* |
9.27%* |
-202bps |
4.19% |
26.20% |
– |
*No.s annualized
Two-Wheeler & MSME – Financial Highlights |
||||||
Particulars (In ₹ Crores) |
Q1 FY22 |
Q1 FY21 |
YoY% |
FY21 |
FY20 |
YoY% |
Assets Under Management (AUM) |
154.1 |
218.0 |
-28% |
171.3 |
238.4 |
-28% |
Total Disbursement |
23.1 |
– |
– |
92.1 |
220.5 |
-58% |
Gross Total Income |
14.5 |
16.8 |
-14% |
63.6 |
70.1 |
-9% |
Pre-Provisioning Operating Profit |
6.8 |
8.4 |
-20% |
27.3 |
29.5 |
-7% |
Total Provisioning & Write-Offs |
3.8 |
4.5 |
-16% |
17.9 |
6.7 |
168% |
Profit After Tax |
2.1 |
3.3 |
-36% |
8.0 |
18.2 |
-56% |
GNPA % |
10.90% |
1.64% |
926 bps |
6.60% |
1.50% |
511 bps |
NNPA % |
3.32% |
0.78% |
254 bps |
0.87% |
0.71% |
16 bps |
RoE* % |
12.49%* |
19.59%* |
-710 bps |
12.85% |
35.38% |
– |
*No.s annualized
Total Provisions as on 30th June’21 were ₹19.47 crores covering 12.64% of the total AUM.
About Arman Financial Services Limited
Arman Financial Services Ltd (NSE: ARMANFIN) (BSE: 531179) is a category ‘A’ Non-Banking Finance Company (NBFC) active in the 2-Wheeler, MSME, and Microfinance Lending business. The Microfinance division is operated through its wholly-owned subsidiary, Namra Finance Ltd, an NBFC-MFI. The group operates mostly in unorganized and underserviced segment of the economy and mostly serves niche rural markets in Gujarat, Madhya Pradesh, Uttar Pradesh, Maharashtra, Uttarakhand, Rajasthan, and Haryana through its network of 246 branches.
Arman’s big differentiator from a Bank and other NBFCs is the last mile credit delivery system. They serve areas and clients where it is simply not possible for banks to provide financial services under the current market scenario. For more information, please visit our web site www.armanindia.com.
Certain statements in this document that are not historical facts are forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Arman Financial Services Ltd will not be in any way be responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
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