Arman Financial Services (ARMANFIN) Q4 06/07 earnings summary

Executive summary

• FY07 income from operations rose 60% YoY to ₹312.80 lakh; PBT increased 38% to ₹84.80 lakh and PAT reached ₹54.15 lakh.

• Growth was driven by expanding retail finance activity, including two- and three-wheelers, used vehicles, personal loans and microfinance.

Financial highlights

• Total income was ₹315.22 lakh vs ₹195.38 lakh in FY06; operating income was ₹312.80 lakh vs ₹195.35 lakh.

• PBT was ₹84.80 lakh vs ₹61.43 lakh; PAT was ₹54.15 lakh vs ₹40.74 lakh.

• Interest expense rose to ₹84.41 lakh from ₹26.21 lakh; non-cash charges were ₹37.95 lakh vs ₹22.92 lakh.

• No dividend was recommended; ₹10.10 lakh was transferred to special reserve, with ₹141.82 lakh carried forward.

Outlook and guidance

• Management viewed FY08 growth prospects as favourable, supported by manufacturing and services growth, resilient retail-credit demand and rising incomes.

• Expansion of microfinance was a strategic priority; management cited local-market knowledge, dealer reach and recovery performance as strengths.

• ICICI Bank sanctioned a ₹500 lakh microfinance term-loan facility in June 2007; management expected to mobilize additional resources.