Ahmedabad, India, 14 August, 2015: Arman Financial Services Ltd (Arman), a leading Gujarat based

non-banking financial company (NBFC), with interests in microfinance and two wheelers loans,
announced its financial results for the First quarter ended 30 June, 2015.
Commenting on the Companys performance for Q1 FY2016, Mr. Jayendra Patel, Vice Chairman &
Managing Director, Arman Financial Services said, I am happy with the overall performance of the
company, with the total AUM of the company having grown from Rs 91.39 Cr on 30 June 2014 to Rs
127.70 Cr as on 30 June 2015, a growth of 39.73%. A large part of this growth has been driven by
Microfinance business where the AUMs have grown to Rs 77.05 Cr as on 30 June 2015, a growth of
64.44%. We had a good quarter with our overall revenues jumping to Rs 8.87 Cr from Rs 6.68, an overall
growth of 32.75% YOY.
We are progressing well in Madhya Pradesh. We have opened 15 branches out there of which 13 are
operational. The business is scaling up and we are confident that this geography will provide us with the
next level of growth in our microfinance business.
We are looking at further expansion in the 2 wheeler finance business. There has been some recovery in
demand and we are planning to open up a new branch in Madhya Pradesh. We have already hired the
team and the branch should be operational in this quarter.
As of now there are 45 branches operational in microfinance (32 in Gujarat and 13 in Madhya Pradesh).
Overall branch strength including both microfinance and two wheeler business is 49.
In the Microfinance business, we have started disbursing 2 year loans to our older customers in select
areas and the product response has been good.

Consolidated Business Review

Financial Highlights
Q1 FY2015-16 (Apr June 2015) v/s. Q1 FY2014-15 (Apr June 2014)
Net Revenues increased by 32.75% to Rs. 8.87 Cr from Rs. 6.68 Cr
Employee costs increased by 22.62% to Rs. 1.31 Cr from Rs. 1.07 Cr
Interest costs increased by 46.30% to Rs. 3.29 cr from Rs. 2.25 cr
Net Profit after Tax was up by 19.82% to Rs. 2.04 cr from Rs. 1.70 cr.
Earnings Per Share increased 19.82% to Rs. 2.94 from Rs. 2.46

Operational Highlights
Q1 FY2015-16 (Apr June 2015) v/s. Q1 FY2014-15 (Apr June 2014)
The company now has 15 branches operational in Madhya Pradesh for the Microfinance business.
The disbursements have started in 13 of them
The average Monthly disbursement was Rs 13.46 Cr in Microfinance Business
The average Monthly disbursement was Rs 4.12 Cr in 2 wheelers & others finance business of
Arman Financial Services Ltd (Seasonally, Q3 has the highest disbursements in the year)
We expect the interest costs to gradually come down as we capture the gain from the investment
grade rating and replace the higher cost borrowings with lower cost borrowings

Business Mix (Consolidated)

Q1

Q1

(Apr Jun)

(Apr Jun)

FY 2015-16

Namra Finance
Arman Financial

Revenues (Rs. Cr.)

12 Months

12 Months

YOY

(Apr Mar)

(Apr Mar)

YOY

FY 2014-15

Change (%)

FY 2014-15

FY 2013-14

Change (%)

4.85

3.19

51.86%

14.36

6.19

131.99%

4.02

3.49

15.28%

15.23

18.28

-16.68%

8.87

6.68

32.75%

29.59

24.47

20.92%

Services
Total

We have started seeing the results of higher disbursements in our revenue growth. We will continue
opening new branches and expect good growth in our Microfinance AUM over the year.
As on date, while the entire loan portfolio of Namra is microfinance, the loan portfolio of Arman
Financial Services is largely Asset Loans (2 & 3 Wheeler loans). A small portion is microfinance
loans, which have been securitized by Namra Finance to Arman Finance for cash flow management
by the group.

Expenditure Analysis (Consolidated)

Q1

Q1

12 Months

12 Months

(Apr Jun)

(Apr Jun)

YOY

(Apr Mar)

(Apr Mar)

YOY

FY 2015-16

FY 2014-15

Change (%)

FY 2014-15

FY 2013-14

Change (%)

Employee Costs

1.31

1.07

22.43%

5.23

4.54

15.20%

Other Expenses

1.18

0.75

57.33%

4.17

4.02

3.73%

Interest Costs

3.29

2.25

46.22%

10.74

9.12

17.76%

Total Costs

5.78

4.07

42.01%

20.15

17.68

13.97%

Revenues (Rs. Cr.)

Our employee count has increased with the hiring of more people for our newer branches. Our
funding costs have risen at a higher rate as the incremental loans are being raised at a higher cost
2014

as these loans are funded by Financial Institutions, charging higher rates than banks. Incremental

portfolio increase is being funded by borrowed money rather than equity, and therefore, will increase
borrowing costs in proportion to AUM increase.

Profitability Mix (Consolidated)

Q1

Q1

12 Months

12 Months

(Apr Jun)

(Apr Jun)

YOY

(Apr Mar)

(Apr Mar)

YOY

FY 2015-16

FY 2014-15

Change (%)

FY 2014-15

FY 2013-14

Change (%)

EBIT

6.34

4.79

32.39%

19.99

15.79

26.60%

PAT

2.04

1.7

19.82%

6.15

4.49

36.97%

EPS (Rs Per Share)

2.94

2.46

19.82%

8.89

6.49

36.97%

58.16

48.71

19.40%

Particulars (Rs. Cr.)

Book Value (Per Share)

The profitability jump for this quarter is lower than income growth, due to higher operational costs,
driven by higher consultancy charges and the need to staff for the incremental growth. Another factor
is that as we are increasing the leverage in our balance sheet and incremental increase in AUM will
be funded by interest bearing debt versus equity.

Net Interest Income (NII) & Net Interest Margin (NIM) Analysis (Consolidated)

Consolidated (Rs. Cr.)

Q1

Q2

Q3

Q4

Q1

(Apr Jun)

(Jul Sep)

(Oct Dec)

(Jan Mar)

(Apr Jun)

FY 2014-15

FY 2014-15

FY 2014-15

FY 2014-15

FY 2015-16

Period Ending (AUM)

91.39

97.34

110.58

114.88

127.7

Net Interest Income (NII)

4.43

4.55

4.44

5.43

5.58

Net Interest Margin (NIM)

19.42%

19.29%

17.08%

19.27%

18.39%

(Annualised)

The Net Interest Income has grown by 25.86 % from Rs 4.43 Cr to Rs 5.58 Cr this quarter. Our
consolidated Annualised NIMs are 18.39% in the last one year.
We are also looking to raise Tier 2 Capital to help us better leverage the balance sheet. We have
made some progress in discussions and hope to raise some capital in this financial year.

Business Tracker (Microfinance)

Particulars (Rs. Cr.)

Q1

Q2

Q3

Q4

Q1

(Apr Jun)

(Jul Sep)

(Oct Dec)

(Jan Mar)

(Apr Jun)

FY 2014-15

FY 2014-15

FY 2014-15

FY 2014-15

FY 2015-16

AUM

46.85

51.62

57.73

65.05

77.05

Disbursement for the Qtr

22.15

27.55

30.04

34.13

40.38

3.58

3.91

4.50

5.50

5.80

Gross Interest Income (Interest

Income + Processing Fee)

Disbursement has increased by 82.35% YOY, and the Interest Income has increased by 61.76%.
Our growth in disbursements has increased and will reflect in higher Interest Income in the coming
quarters.
Currently majority of the microfinance loans have a maturity of less than 1 year. We have gradually
started 2 year loans and are gradually ramping it up across our branches. This will help us increase
our AUM at a faster pace and gradually help us reduce our operational costs.

NPA Analysis (Microfinance)

Microfinance (Rs. Cr.)

Q1

Q2

Q3

Q4

Q1

(Apr Jun)

(Jul Sep)

(Oct Dec)

(Jan Mar)

(Apr Jun)

FY 2014-15

FY 2014-15

FY 2014-15

FY 2014-15

FY 2015-16

Gross NPA

0.04

0.02

0.07

0.07

0.00

0.04

0.02

0.07

0.07

0.00

0.09%

0.05%

0.12%

0.11%

0.00%

Provisions
Net NPA
Net NPA Percentage

This quarter represents a milestone in our microfinance business. The NPAs in the microfinance
business are 0.00% as there are no overdues greater than 180 days. Since the RBI has asked to
provision 1% against the standard assets, we no longer provide provision for NPAs as our actual
NPAs have been much below 1%.

Business Tracker (2 Wheeler Finance)

Particulars (Rs. Cr.)

Q1

Q2

Q3

Q4

Q1

(Apr Jun)

(Jul Sep)

(Oct Dec)

(Jan Mar)

(Apr Jun)

FY 2014-15

FY 2014-15

FY 2014-15

FY 2014-15

FY 2015-16

AUM

44.53

45.73

52.85

49.83

50.65

Disbursement for the Qtr

11.20

13.43

16.57

13.25

12.29

3.09

2.93

2.84

3.24

3.07

Interest Income

The 2 Wheeler business has grown by 13.74% on a YOY basis to 3.07 Cr. The 2 Wheeler sales
have slowed down over the last 12 months and we are now aiming to open new branches in the
coming year. One of our branch is scheduled to open in Madhya Pradesh later this year.

NPA Analysis (2 Wheeler Finance)

2 Wheeler Finance (Rs. Cr.)

Q1

Q2

Q3

Q4

Q1

(Apr Jun)

(Jul Sep)

(Oct Dec)

(Jan Mar)

(Apr Jun)

FY 2014-15

FY 2014-15

FY 2014-15

FY 2014-15

FY 2015-16

Gross NPA

0.55

0.70

0.79

0.96

0.94

Provisions

0.06

0.07

0.09

0.09

0.10

Net NPA

0.49

0.63

0.70

0.87

0.84

0.89%

1.23%

1.09%

1.52%

1.66%

Net NPA Percentage

The NPAs in the 2-wheeler business have increased moderately in this quarter. Some challenges
being faced by the 3-Wheeler operators due to increased competition in alternative modes of
transport such as taxi services and public transportation.

We are monitoring the portfolio carefully and have been gradually withdrawing from the 3-Wheeler
market, due to lack of financial viability for 3-Wheeler operators.

Note - On February 14, 2013, Namra Finance Ltd. became the first company in India to receive the long awaited "NBFC-MFI" (NonBanking Finance Company - Microfinance Institution) License. This special category of NBFC was created by the RBI based on the
Malegam Committee recommendations to serve the underserviced and the poor segment of India by providing Microfinance, or
small income-generating loans at reasonable interest rate, collateral-free.

About Arman Financial Services Ltd

Arman Financial Services Ltd (BSE: 531179) is a category 'A' Non-Banking Finance Company (NBFC)
active in the 2-wheeler finance business. Arman also operates a wholly-owned subsidiary, Namra Finance
Ltd, exclusively for its Microfinance operations. It operates mostly in unorganized and underserviced
segment of the economy and mostly serve niche markets in Gujarat. The company has recently forayed into
Madhya Pradesh for its microfinance operations.
Arman's big differentiator from a Bank and other NBFCs is the last mile credit delivery system. They serve
areas and clients where it is simply not possible for banks to provide financial services under the current
market scenario.
For more information please visit our web site www.armanindia.com .

If you have any questions or require further information, please feel free to contact
Aalok Patel
Arman Financial Services Ltd
Tel: +91 79 40507000
Email:
aalokpatel@armanindia.com
Certain statements in this document that are not historical facts are forward looking statements. Such forward-looking statements are subject to
certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors that
could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Arman Financial Services Ltd will
not be in any way be responsible for any action taken based on such statements and undertakes no obligation to publicly update these forwardlooking statements to reflect subsequent events or circumstances.