Manappuram Finance Limited Q2 profit rose 222.9% as gold AUM rose

Manappuram Finance Limited reported consolidated profit after tax of Rs 701 crore in Q2 FY2027, up 222.9% year-on-year from Rs 217 crore, as consolidated gold assets under management rose 92.5% to Rs 60,640 crore. Net interest income grew 39.1%, while operating expenses increased 6.2%.

Why did Manappuram’s Q2 profit increase?

Manappuram’s consolidated profit increased because net interest income, operating income and pre-provisioning profit grew faster than operating expenses, while loan-loss provisions declined from a year earlier. Profit after tax rose to Rs 701 crore in Q2 FY2027 from Rs 217 crore in Q2 FY2026 and Rs 585 crore in Q1 FY2027. That was a 222.9% year-on-year increase and a 19.9% quarter-on-quarter increase.

Revenue from operations rose 46.2% year-on-year to Rs 3,356 crore, while finance expenses increased 57.6% to Rs 1,380 crore. The resulting net interest income, or NII, was Rs 1,976 crore, 39.1% above Rs 1,420 crore a year earlier and 11.5% above Rs 1,773 crore in Q1 FY2027. Other income was Rs 29 crore, compared with Rs 5 crore in Q2 FY2026.

Pre-provisioning profit, which is profit before loan-loss provisions and tax, reached Rs 1,245 crore, up 75.5% year-on-year and 21.4% sequentially. Loan-loss provisions were Rs 307 crore, 24.8% below Rs 408 crore in Q2 FY2026, although they rose 25.9% from Rs 244 crore in Q1 FY2027. Profit before tax consequently rose 211.7% year-on-year to Rs 938 crore.

How much did Manappuram’s gold loan business grow?

Manappuram’s consolidated gold AUM grew 92.5% year-on-year to Rs 60,640 crore in Q2 FY2027, accounting for most of the Rs 73,303 crore consolidated AUM. Gold AUM also rose 6.4% from Rs 57,006 crore in Q1 FY2027, compared with 0.3% sequential growth in non-gold AUM to Rs 12,663 crore.

The contrast between the two books was marked. Gold AUM rose from Rs 31,505 crore in Q2 FY2026, whereas non-gold AUM declined 11.3% from Rs 14,284 crore. In the AUM mix, Manappuram’s standalone gold book was Rs 58,097 crore and subsidiary Asirvad’s gold loan book was Rs 2,508 crore. Asirvad’s microfinance institution, or MFI, AUM was Rs 5,396 crore, up 11.8% sequentially and 11.3% year-on-year.

Gold tonnage held against the consolidated gold portfolio increased to 70 tonnes from 57 tonnes a year earlier and 67 tonnes in the preceding quarter. Gold customers rose 14.6% year-on-year to 30 lakh, while gold branches increased 1.7% to 4,113. The larger rise in loans than branches lifted gold AUM per branch to Rs 15 crore from Rs 8 crore in Q2 FY2026.

At the standalone level, gold AUM was Rs 58,097 crore, a 92.1% year-on-year increase, while the average gold loan ticket rose to Rs 1.38 lakh from Rs 1.33 lakh in Q1 FY2027 and Rs 1.28 lakh at FY2026-end. Standalone gold holdings rose to 66.5 tonnes from 64.2 tonnes in Q1 FY2027. Standalone loan-to-value, or LTV, was 64.5%, versus 65.6% in Q1 FY2027.

Did Manappuram control operating costs as the loan book expanded?

Manappuram held consolidated operating expenses nearly flat sequentially at Rs 760 crore while consolidated AUM rose 5.3% to Rs 73,303 crore. Operating expenses were only 0.1% higher than Rs 759 crore in Q1 FY2027 and 6.2% higher than Rs 716 crore in Q2 FY2026, despite AUM increasing 60.1% year-on-year.

The consolidated operating-expense-to-AUM ratio was 4.22% in Q2 FY2027, down 166 basis points year-on-year and 35 basis points quarter-on-quarter. One basis point is one-hundredth of a percentage point. Employee benefit expense was Rs 488 crore, up 12.9% year-on-year but down 1.8% from Q1 FY2027, while administrative expense fell 4.1% year-on-year to Rs 272 crore.

Standalone cost measures moved further lower. The standalone operating-expense-to-AUM ratio was 3.44%, down 205 basis points year-on-year and 32 basis points sequentially. Standalone operating expenses declined 1.7% quarter-on-quarter to Rs 540 crore, while standalone AUM grew 4.5% to Rs 63,733 crore and pre-provisioning profit rose 23.5% to Rs 1,112 crore.

Consolidated return on average assets, or ROAA, was 3.89% in Q2 FY2027, up 220 basis points year-on-year and 37 basis points sequentially. Return on equity, or ROE, was 16.51%, compared with 6.9% in Q2 FY2026 and 14.3% in Q1 FY2027. On a standalone basis, return on assets was 4.2% and ROE was 15.7%.

What changed in Manappuram’s funding and balance sheet?

Manappuram’s consolidated borrowings rose 72.7% year-on-year to Rs 65,168 crore at September 2026, funding 62.0% growth in loans and advances to Rs 73,288 crore. Borrowings were also 8.3% above Rs 60,171 crore at June 2026, while total assets increased 7.6% sequentially to Rs 83,907 crore.

Term loans were the largest funding category at Rs 31,656 crore, or 48.6% of consolidated borrowings, compared with Rs 17,848 crore and 47.3% a year earlier. External commercial borrowings and United States dollar bonds totalled Rs 12,551 crore, or 19.3% of borrowings. Working capital demand loans and cash credit stood at Rs 10,845 crore, representing 16.6%.

The consolidated cost of borrowing declined to 8.91% in Q2 FY2027 from 9.07% in Q2 FY2026 and 8.94% in Q1 FY2027. Net worth increased 36.0% year-on-year to Rs 17,289 crore. At the standalone level, the capital-to-risk-weighted-assets ratio, or CRAR, was 22.4%, compared with 21.3% in Q1 FY2027.

Standalone asset-quality indicators showed gross non-performing assets, or GNPA, unchanged sequentially at 1.8% in Q2 FY2027. Net non-performing assets, or NNPA, were 1.2%, compared with 1.1% in Q1 FY2027 and 1.5% at FY2026-end. These metrics apply to the standalone business, while consolidated loan-loss provisions were Rs 307 crore in the quarter.

Conclusion

Manappuram’s Q2 FY2027 outcome combined a 92.5% expansion in consolidated gold AUM with a 6.2% increase in year-on-year operating expenses, producing Rs 1,245 crore of pre-provisioning profit and Rs 701 crore of consolidated profit after tax. The portfolio mix shifted further toward gold lending as non-gold AUM fell 11.3% year-on-year.

Next, investors can watch execution of Manappuram’s disclosed gold-loan growth initiatives, including branch expansion, online gold loans, business associates and digital marketing. Management also plans to activate customers through dedicated teams, schemes and local marketing, while employee training and revised incentive schemes are intended to increase branch productivity.