Arman Financial Services Ltd
Arman Financial Services Ltd

Arman financial reports a 100% increase in H1 FY20 profit after tax at Rs 24.2 crore

ANI | Updated: Dec 13, 2019 15:05 IST

Ahmedabad (Gujarat) [India], Dec 13 (ANI/PRNewswire): 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 second quarter ended September 30, 2019.

Consolidated Financial Highlights - Q2 FY2019-20 (July - Sep 2019) v/s. Q2 FY2018-19 (July - Sep 2018)

  • Asset under management as on 30 Sep 2019 stood at Rs 753.1 crores (+46 per cent YoY)
  • Consolidated Debt-Equity Ratio as of 30 September 2019 stood at 4.75:1
  • Net Total Income increased by 65 per cent to Rs 31.7 crores up from Rs 19.2 croreCost-to-Income Ratio improved to 40.8 per cent(lower by 270 bps)
  • Pre-Provisioning Operating Profit was higher by 73 per cent to Rs 18.7 crore as against Rs 10.8 crore

Consolidated Financial Highlights - H1 FY2019-20 (April - Sep 2019) v/s. H1 FY2018-19 (April - Sep 2018)

  • Net Total Income increased by 70 per cent to Rs 61.1 crores up from Rs 36.0 crore
  • Cost-to-Income Ratio improved to 40.5 per cent for H1 FY20 as against 46.8 per cent
  • Pre-Provisioning Operating Profit increased by 90 per cent to Rs 36.4 crore compared to Rs 19.2 crore

Operational Highlights - Q2 FY2019-20 (July - Sep 2019) v/s. Q2 FY2018-19 (July - Sep 2018)

  • Total operational branches as on September 30 2019, stood at 223, of which 182 are in microfinance segment, 34 in MSME, and the rest are in two-wheeler
  • Asset quality continued to remain robust - consolidated GNPA stood at 1.2 per cent and NNPA at 0.6 per cent

"We delivered a resilient and solid all-round performance in the first half of this year, despite the prevailing macro-economic challenges and ongoing liquidity squeeze impacting the NBFC space. Such a performance in tough times validates the robustness of our business model. Further, just to point out, we have implemented Indian Accounting Standard (IndAS) in H1 FY20, which has resulted in many national changes in the financials compared to the previous iGAAP Standards," said Jayendra Patel, Vice Chairman and Managing Director, Arman Financial Services, commenting on the Company's performance for H1 FY2019-20.
"Continued traction in the MFI and MSME business, coupled with an improvement in the cost-to-income ratio, has enabled us to post strong operating performance. Asset quality remained well within check and steady vis-a-vis last year, as we continue to prioritize the quality of the book," he said.
"Although the NBFC sector, in general, continues to face tough liquidity conditions, having a positive ALM, superior asset quality, and a strong performance track record has helped us to successfully raise debt capital albeit at slightly higher rates. On the leverage front, we remain comfortable and have sufficient capital to drive growth in the current year, Patel added.
"As a part of our FY20 expansion strategy, we have launched 14 new branches during the second quarter. Looking ahead, we are confident of continuing our positive growth momentum through the successful ramp-up of the newly launched branches, penetration into newer geographies, and expansion of our customer base in a calibrated manner. More importantly, we will continue to exercise prudence and closely track rural macroeconomic indicators and make all necessary adjustments to protect asset quality," Patel further added.
Segmental Performance Update - Q2 & H1 FY2019-20 v/s. Q2 & H1 FY2018-19
Microfinance - Financial Highlights

  • MFI AUM stood at Rs 555.3 crores in Q2 FY20 growth of 57 per cent YOY
  • Net Profit increased by 87 per cent YoY to Rs 7.2 crores in Q2 FY20 and 98 per cent YoY to Rs 14.4 crores in H1 FY20, driven by a proportionately lower increase in operational expenses and taxes.
  • GNPA and NNPA stood steady at 0.8 per cent as of 30 Sep 2019
  • Post ECL adjustment, NNPA stood at 0.2 per cent. Additional ECL provision of Rs 0.7 crores (a notional charge) was made in Q2 after taking into account the prevalent challenging macro-environment and impact of floods in few states

Two-Wheeler & MSME - Financial Highlights

  • 2W & MSME AUM increased by 30 per cent YoY to Rs 221.8 crores in Q2 FY20
  • MSME book witnessed strong traction - growing by 94 per cent YoY to Rs 125.8 crores
  • 2W AUM stood at Rs 96.0 crore, a minor decline over the previous year due to the ongoing slump in two-wheeler sales in India.
  • Net Profit grew by 56 per cent YoY in Q2 FY20 and 95 per cent YoY in H1 FY20 driven by higher blended yields and lower provisions in the MSME segment compared to 2W segment.
  • Total GNPA and NNPA saw a YoY improvement of 51 bps and 31 bps respectively

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