Magma Fincorp rose 4.22% to Rs 79 at 10:59 IST on BSE after consolidated net profit rose 15.28% to Rs 30.69 crore on 27.46% growth in total income from operations to Rs 486.78 crore in Q2 September 2013 over Q2 September 2012.
The Q2 result was announced after market hours on Thursday, 31 October 2013.
Meanwhile, the S&P BSE Sensex was up 58.60 points or 0.28% at 21,223.12.
On BSE, 86,000 shares were traded in the counter as against average daily volume of 13,274 shares in the past one quarter.
The stock hit a high of Rs 81.30 and a low of Rs 77.20 so far during the day. The stock had hit a record high of Rs 110.40 on 10 January 2013. The stock had hit a 52-week low of Rs 62 on 31 October 2012.
The stock had outperformed the market over the past one month till 31 October 2013, surging 19.75% as compared to the Sensex's 9.21% rise. The scrip had, however, underperformed the market in the past one quarter, declining 8.12% compared with the Sensex's 9.4% rise.
The small-cap company has equity capital of Rs 38.02 crore. Face value per share is Rs 2.
On standalone basis, Magma Fincorp's net profit rose 14% to Rs 32.20 crore on 28% growth in gross revenue to Rs 511 crore in Q2 September 2013 over Q2 September 2012.
The top line growth in Q2 September 2013 was backed by a robust increase in spreads. Net interest spread (NIS) stood at 5.71% in Q2 September 2013 up from 4.69% in Q2 September 2012.
The company's loan book increased by 23% YoY to Rs 16698 crore as on 30 September 2013 and capital adequacy stood at 16.1% as on 30 September 2013.
Commenting on the company's Q2 performance, Mr. Sanjay Chamria, VC and MD, Magma Fincorp said, "In the backdrop of a tough economic environmnet and inconsistent cash flows in our customer's hands we remain focused on improving our profitability and portfolio quality. Being consistent with this focus, we have improved our net spreads by 102 basis points YoY and continue to work on our portfolio quality. On the asset quality front, in line with our conservative approach to loss accounting, we have made a significant amount of provisioning for NPAs in the last two quarters. With the monsoons doing well and expectations of an uptick in commercial activity post monsoons, we expect the economic environment to improve and cash flows in the customers hand to stabilize. The second half of the year normally sees an improvement in collections and we expect an improvement in collection efficiency across all products in the coming quarters".
Magma Fincorp said the performance in Q2 September 2013 is commendable in the backdrop of a challenging economic environment wherein primary sales numbers of major products like cars, commercial vehicles and construction equipment have dropped drastically. The impact of fuel price hikes and inflation coupled with subdued commercial activity have resulted in lower utilization of earning assets and temporary cash flow constraints across all customer segments, the company said. As a result, the company has made NPA provision of Rs 74 crore for first half of FY 2014. While assisting customers who want more time to pay instalments, the company recognizes NPA in its books as per original repayment schedule and does not restructure any contract in its books, Magma Fincorp said in a statement.
Magma Fincorp is one of the largest non-banking finance companies (NBFC) in India engaged in providing commercial vehicle finance, construction equipment finance, car and utility vehicle finance, Suvidha loans (refinance), strategic construction equipment finance, tractor finance, SME loans and loans against gold to individual and corporate customers.
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