Bad debt write off erodes Magma Fincorp profits

Our Bureau Kolkata | Updated on January 31, 2014

Higher provisioning for NPAs too plays the spoilsport

Asset finance company Magma Fincorp Ltd reported a 6 per cent decline in standalone net profit to ₹31 crore for the quarter ending December 31, 2013. It had reported a net profit of ₹33 crore for the same period last fiscal.

Despite an over 12 per cent increase in total income to ₹455 crore, higher provisioning for non-performing assets (NPAs) and bad debts written off dragged down its bottomline. During the period under review, provisioning for NPAs rose by nearly 169 per cent to ₹43 crore.

Consolidated net profit declined marginally by 3 per cent at ₹35 crore for the December quarter, over the same period last fiscal.

According to a release issued by the Kolkata-based company, its loan book saw a 20 per cent increase (year-on-year) at ₹17,224 crore.

“On the asset quality front, we have made a significant amount of provisioning for NPAs,” Sanjay Chamria, Vice-Chairman & MD, Magma Fincorp, was quoted in the release. The company stock closed at ₹66.75, up by 2.30 per cent on the BSE on Friday.

Published on January 31, 2014

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