Magma Fincorp Q4 loss widens to Rs 648 cr

NEW DELHI: Non-banking finance company Magma Fincorp on Monday reported widening of its consolidated net loss to Rs 647.72 crore for the last quarter of FY21 on accelerated write-offs and provisions.

The company had posted net loss of Rs 355.08 crore during the January-March period of FY20. However, there was a net profit of Rs 13 crore in the preceding quarter ended December 2020.

Total income during Q4 FY21 also fell to Rs 587.14 crore as against Rs 617.62 crore earlier, Magma Fincrop said in a regulatory filing.

For the full year 2020-21, the non-banking lender reported a loss of Rs 558.96 crore as against a profit of Rs 27.05 crore in 2019-20.

Income during the year also fell to Rs 2,352.48 crore from Rs 2,562.88 crore. The interest income was down at Rs 2,165.68 crore as against Rs 2,324.34 crore.

"The company has adopted one of the most conservative policy in the industry for technical write-offs effective Q4FY21. Such policy change has resulted in one-time write-off impact of Rs 274 crore during the quarter," it said.

There was an additional management overlay provision of Rs 621 crore during the reported quarter for the second wave of COVID-19, it added.

The company holds cumulative provisions to the tune of Rs 1,192 crore as of March 2021 and the management is confident of the adequacy of the same to counter the pandemic-related impact on future profitability, the company said.

"Had the company not moved to accelerated write-off policy and not created additional provisions of Covid second wave, the profit before tax and profit after tax for the year ended March 31, 2021 would have been Rs 146 crore and Rs 111 crore respectively," it said further.

On the asset quality front, the gross non-performing assets (NPAs) by end of March 2021 fell to 3.7 per cent of gross advances, as against 6.4 per cent earlier. The net NPAs were 1.2 per cent, down from 4.2 per cent.

"The one-time provisions and write-offs have also resulted in an uptick in asset quality of the remaining book, standing as one of the best in industry with net stage 3 assets (as of Mar-21) at 1.2 per cent and overall ECL (expected credit loss) provisions at 9.5 per cent of the total loan book," it said.

The assets under management (AUM) at end of FY21 fell to Rs 14,225 crore from Rs 16,134 crore.

The Kolkata-based company said 97 per cent of its portfolio its either secured by collateral or has a sovereign guarantee cover.

The company also said the board of directors has not recommended any dividend for FY21 in order to conserve capital, given the challenging situation caused by the ongoing pandemic and loss during the year.

Stock of Magma Fincorp closed 4.97 per cent up at Rs 136.25 apiece on BSE.