Manappuram Finance Q1 FY2027: Gold loans power growth as yields stabilise and branch expansion returns

Manappuram Finance started FY2027 with a sharp jump in headline profitability and a balance sheet that tilted even more decisively toward gold loans. In Q1 FY2027, consolidated assets under management rose to 69,635 crore, up 57.2% year on year and 9.1% sequentially. Consolidated profit after tax rose to 585 crore, up 341.4% year on year. Revenue from operations for the quarter came in at 3,033 crore, while net interest income was 1,759 crore.

Management framed the quarter as a continuation of a gold-led expansion cycle, supported by improving operating efficiency and a steady funding profile. Consolidated opex to AUM reduced to 4.59% in Q1 FY2027, down 128 basis points year on year. At the same time, the company used the earnings call to clarify its stance on yields, the revised RBI framework for loan-to-value calculations, and the shape of its branch rollout plans.

Gold loans remain the growth engine

Gold loans were again the clear driver of growth. Consolidated gold AUM reached 57,006 crore in Q1 FY2027, up 97.9% year on year and 11.9% quarter on quarter. In the standalone entity, gold AUM stood at 54,655 crore, up 97.4% year on year.

A key operating theme was pricing and yield. Management said gold loan yields improved by about 59 to 60 basis points during the quarter, largely due to pricing actions taken after an earlier period of overcorrection. The CFO noted that the movement was not due to a shift in customer mix, but rather a conscious alignment of pricing with peers. On the call, the company guided that gold loan yields should remain around 18% with an expected band of plus or minus 25 basis points.

The business model continues to move toward a heavily digital flow. The investor presentation indicates that Online Gold Loans have become a very large share of gold AUM, with OGL share at 90% in Q1 FY2027. The company also disclosed continued growth in gold customers and tonnage at the consolidated level.

Financial snapshot for Q1 FY2027

The quarter showed a strong pickup in profitability alongside solid balance sheet growth.

The balance sheet expanded as well. Total consolidated assets were 77,990 crore as of June 30, 2026, with loans and advances at 69,218 crore and borrowings at 60,171 crore. Net worth stood at 16,552 crore.

Funding costs remained stable at the consolidated level. The presentation shows consolidated cost of borrowing at 8.9% in Q1 FY2027, unchanged from Q4 FY2026. On the call, management acknowledged short-term rate pressures and elevated reference rates but said marginal funding cost is expected to be around the 8.8% to 9% handle.

AUM mix shows gold’s growing share

The AUM mix data underlined how sharply the company has pivoted toward gold loans. In Q1 FY2027, consolidated gold loans represented 57,006 crore, while non-gold AUM was 12,629 crore. Within the standalone entity, the presentation shows gold at 54,655 crore, MSME and others at 3,432 crore, vehicle and equipment finance at 2,562 crore, and onlending at 322 crore.

Management also discussed a medium-term portfolio preference. On the call, the company stated it wants to maintain around 75% to 80% of consolidated AUM in gold, while containing microfinance below 10% of consolidated AUM.

RBI framework, LTV movement, and new gold products

The quarter saw investor focus on the revised RBI framework around LTV computations. Management confirmed implementation from April 1, including factoring interest while calculating LTV and applying ticket-size-linked rules.

The standalone presentation showed average LTV at 65.6% in Q1 FY2027 versus 57.3% in Q4 FY2026. On the earnings call, management attributed most of the movement to a denominator effect from gold price changes. They also indicated that normal average LTV levels tend to be in the 64% to 67% range.

A second theme was the rollout of an income-generating gold loan product, positioned as a cash-flow-based product with EMI options. Management described these loans as being underwritten based on assessed cash flows, with pricing indicated at 14% to 16%. They stated an internal maximum LTV cap of 85% for this product. The company also said it trained staff before implementation to support the cash-flow underwriting process.

Non-gold segments: calibrated growth and clean-up

The non-gold businesses showed a mixed picture.

Asirvad Microfinance reported Q1 FY2027 AUM of 7,188 crore and PAT of 21 crore. The investor deck showed that Asirvad’s portfolio includes a meaningful gold loan book, and management noted this creates an opportunity to negotiate borrowing costs lower with lenders. Asset quality in Asirvad, as disclosed in the deck, showed GNPA at 4.8% and NNPA at 1.4% in Q1 FY2027.

Vehicle and equipment finance remained under pressure. The presentation showed AUM at 2,562 crore in Q1 FY2027 versus 2,991 crore in Q4 FY2026. Management said disbursals are paused while the company reassesses strategy, with a stronger focus on collections using digital platforms, dedicated teams for different delinquency buckets, third-party agencies, and AI tools.

The MSME and allied book in the standalone entity was 3,303 crore in Q1 FY2027, with GNPA at 5.9% versus 7.1% in the prior quarter. Housing finance AUM was 1,847 crore and largely flat quarter on quarter.

Branch expansion returns to the agenda

Branch growth is historically one of the most important levers for gold loan growth. In Q1 FY2027, the press release stated that total branches expanded to 5,328.

More importantly, management said on the concall that removal of the requirement for prior RBI approval for opening branches has facilitated a sharper expansion plan. The company indicated a plan to open around 500 branches. It acknowledged that the initial pace may be slow, but expects branch openings to pick up from the second quarter.

Management also provided an indicative geographic split for new branches: around 60% in South and Central India, about 25% in eastern states, and the balance across the rest of India.

What management guided for FY2027 and beyond

The company gave several clear directional indicators for investors.

It guided gold loan growth for FY2027 at around 25% to 30%, noting the role of seasonality in quarterly growth rates. Management also reiterated that the yield should stay around 18% with limited fluctuation.

On profitability, the company shared longer-term targets: ROA around 3.5% to 4% and ROE in the 15% to 18% range, with an expectation to reach around 18% ROE over about three years.

The call also included a leadership update. The Chairman stated that Ashish Singh has been appointed as MD and CEO and is expected to join by January 1, 2027.

Takeaways

Manappuram Finance’s Q1 FY2027 performance was primarily a story of gold loans, with AUM growth and profitability improving sharply. The company used the quarter to reset yield expectations around 18%, clarify LTV movements as largely gold-price-driven, and highlight a renewed branch expansion push supported by a regulatory change.

Non-gold businesses remain a portfolio that is being managed carefully. Microfinance has returned to quarterly profitability, while vehicle finance is in a collections-led repair phase and other secured businesses are being scaled with an emphasis on asset quality. The company’s stated preference to keep gold as the dominant share of consolidated AUM suggests that execution in branch expansion, pricing discipline, and risk controls will remain the key variables to track through FY2027.