Q3, FY12
Magma Fincorp Disbursals up 50%, PAT at 13.90 Cr

Collection Efficiency at 100.4%
Contribution of High Yield Products at 25%
Total Income increases by 23%
To start Gold Loan and Affordable Housing Finance business in FY13



Kolkata, 16th January 2012:Leading asset finance company, Magma Fincorp Limited announced the Q3, FY12 results today, that reflected strong growth in business disbursals and Assets under Management (AUM) over corresponding quarter of the last year. The disbursements grew at a robust 50% to Rs 1915 Cr, riding high on the performances across product categories. Total Assets on Finance in the books of the company has recorded an impressive increase of 77% since the company has reduced its dependence on securitization and is funding the assets from its capital and debt. The company's Assets under Management stood at Rs 11856 Cr as on 31st Dec 2011. The company has maintained healthy CRAR of 20.3% as on 31st Dec, 2011 despite such growth in Assets on Finance against the mandatory 15% prescribed by the RBI.

Inspite of 77% growth in business of High Yield Products in the 9M, the portfolio quality is maintained and is reflected in Collection Efficiency consistently being above 100% and Write offs at 0.22% - lower than FY 11.

Inspite of repeated increase in the policy rates, the overall spread has been maintained at 4.3% for the 9M resulting in the overall income of the company increasing by 23% to Rs 278.22 crore compared to the corresponding period of the last fiscal.

In view of the change in business strategy from the beginning of the year, Magma has minimized securitization/assignment of its portfolio and significantly reduced its dependence on the selling of loan portfolio as a tool for funding and further, it has also changed its accounting policy on recognition of gain on securitization/assignment and now accrues the income over the tenure of the loan contracts as opposed to the upfront recognition of income on assignment. As a result of the above changes, the profits of the company for the quarter and nine months ended 31st Dec, 2011 is not comparable with the previous year.

The company recorded Profit before Tax (PBT) of Rs 20.57 crore and Profit after Tax (PAT) of Rs 13.90 crore in Q3 after an impact of Rs 5 crores as a consequence of a MTM loss on forex exposure. If the company were to follow the same biz strategy and accounting policy on securitization/ assignment as was done during the previous year, the proforma PAT would have been Rs ~115 crores for the 9M.

Commenting on the company's performance, Mr Sanjay Chamria, Vice Chairman and Managing Director, Magma Fincorp Limited said, "We have shown a strong growth trajectory in our disbursements despite a sluggish growth in industry, increase in the interest rates and rise in fuel costs. The disbursements for the quarter witnessed an encouraging growth of 50%. Our portfolio quality has been robust with Collection performance recorded at 100.4% for the Q3 FY12 and Write offs remaining below FY11 levels at 0.22% to the AUM. We have been able to improve the share of high yield products in the overall disbursement to 25%."

The company recorded strong growth in Car, Suvidha (Refinance) and Tractor Finance during the quarter under review compared to the corresponding period last year. While Car finance grew by 82%, Tractor and Suvidha grew by 88% and 109% respectively during this period. The company has also grown its market share quite significantly in cars, tractors and suvidha during the period under review.

"As the Q4 normally contributes 40% of the annual volume, we are hopeful of delivering on our guidance of 50% growth in disbursement for the year. We have opened 25 new branches during the past two quarters which is also expected to contribute in the last quarter" added Mr Chamria.

The company has decided to start Gold Loan business and Affordable Housing finance business in FY13 for which the team is being set up. The new businesses will commence from 1st of April 2012.



About Magma Fincorp Limited

Magma Fincorp Limited ("Magma") is a non-deposit taking non-banking finance company (NBFC), registered with the Reserve Bank of India (RBI) as an Asset Finance Company. The Company, having started operations over two decades back, is listed on the Bombay Stock Exchange Limited and the National Stock Exchange in India.

Magma provides a bouquet of financial products including financing of Utility Vehicles & Cars, Commercial Vehicles, Construction Equipments, Used Commercial Vehicles, Tractors and SME Loans. Magma has a dedicated base of around 2.7 lac customers and has assets of INR 11856 Cr under management. The company has 196 branches in 20 states and 1 union territory and employs over 5400 people.

Magma has signed a joint venture with HDI Gerling, part of Talanx Group, Germany's third largest insurance group to start a general insurance company in India, which since has received R1 license from the insurance regulator.


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