Arman Financial Services Ltd.

501-504 SAKAR III, OPP. OLD HIGH COURT, OFF ASHRAM ROAD, AHMEDABAD, GUJARAT-380014, INDIA
PH. : +91-79-30005000, 27541989 FAX : +91-79-27543666 E-MAIL : finance@armanindia.com Website : www.armanindia.com

Ahmedabad, India, 11 November, 2014: Arman Financial Services Ltd (Arman), a leading Gujarat based nonbanking financial company (NBFC), with interests in microfinance and two wheelers loans, announced its
financial results for the second quarter ended 30th September, 2014.
Commenting on the Companys performance for Q2 FY2015, Mr. Jayendra Patel, Vice Chairman & Managing
Director, Arman Financial Services said, FY2015 has been an encouraging year for us, with a good growth in
revenues driven by our established position in the 2-wheeler finance business in Gujarat and successful foray into
microfinance. We have shifted the entire microfinance business into our subsidiary Namra Finance Ltd, to comply
with the RBI guidelines on NBFC-MFI.
We are scaling up the microfinance business with recent foray into Madhya Pradesh. As of now there are 37
branches operational (34 in Gujarat and 3 in Madhya Pradesh), with a plan to open over 10 new branches in
FY15. Overall branch strength including both microfinance and two wheeler business is 41.
The outlook for our businesses looks highly promising. We want to quickly scale up our microfinance business to
start reaping the benefits of operating leverage. While the business is quite profitable, our return ratios will
improve as we achieve scale and are able to source funds at lower costs due to rating upgrade by CARE to BBB(Investment Grade) and further optimize our balance sheet. We want to consolidate our position as one the
leading 2-wheeler finance companies out of Gujarat.

Consolidated Business Review

Financial Highlights
Q2 FY2015 (Jul Sep 2014) v/s. Q2 FY2014 (Jul Sep 2013)
Net Revenues increased by 12.83% to Rs. 6.84 cr from Rs. 6.06 cr
Expenses increased by 34.10% to Rs. 2.36 cr from Rs. 1.76 cr
Net Profit after Tax was up by 7.96% to Rs. 1.47 cr from Rs. 1.36 cr.
Earnings Per Share increased 8% to Rs. 2.12 from Rs. 1.91

CIN: L55910GJ1992PLC018623

Arman Financial Services Ltd.

501-504 SAKAR III, OPP. OLD HIGH COURT, OFF ASHRAM ROAD, AHMEDABAD, GUJARAT-380014, INDIA
PH. : +91-79-30005000, 27541989 FAX : +91-79-27543666 E-MAIL : finance@armanindia.com Website : www.armanindia.com

Operational Highlights
Q2 FY2015 (Jul Sep 2014) v/s. Q2 FY2014 (Jul Sep 2013)
The company forayed in Madhya Pradesh for the Microfinance business. Overall 4 branches were made
operational (3 in Madhya Pradesh and 1 in Gujarat) in the second quarter.
CARE upgraded the long term ratings to CARE BBB- from CARE BB+. BBB- is considered to be an investment
grade rating.
The average Monthly disbursement was Rs 8.88 Cr in Microfinance Business in Namra Finance Ltd (Armans
wholly owned subsidiary)
The average Monthly disbursement was Rs 4.77 Cr in 2 wheelers & others finance business of Arman
Financial Services Ltd
In the current period, there was a non-cash charge of Rs. 32.81 lakh under the head Contingent Provision for
Standard Assets in Namra Finance Ltd due to RBI guidelines around provisioning for NBFC-MFIs. Without this
charge, the consolidated Profit Before Tax would be higher by a similar amount.

Business Mix (Consolidated)

Q2 (Jul Sep)

Q2 (Jul Sep)

YOY

Revenues (Rs. Cr.)

2014

2013

Change (%)

Microfinance

3.22

1.20

168.33%

2 Wheelers & Others

3.62

4.86

-25.51%

Total

6.84

6.06

12.87%

In FY2013-14, the microfinance business was being transferred from Arman Financial Services to Namra Finance, as
per the RBI guidelines. So while Arman revenues show a negative growth in this quarter, what was happening was
that as the Microfinance loans matured in Arman Finance, they were not renewed and all incremental loans were
disbursed by Namra Finance Ltd.

CIN: L55910GJ1992PLC018623

Arman Financial Services Ltd.

501-504 SAKAR III, OPP. OLD HIGH COURT, OFF ASHRAM ROAD, AHMEDABAD, GUJARAT-380014, INDIA
PH. : +91-79-30005000, 27541989 FAX : +91-79-27543666 E-MAIL : finance@armanindia.com Website : www.armanindia.com

Expenditure Analysis (Consolidated)

Q2 (Jul Sep)

Q2 (Jul Sep)

YOY

Expenditure (Rs. Cr.)

2014

2013

Change (%)

Employee Costs

1.21

0.97

24.74%

Other Expenses

2.31

1.73

33.53%

Interest Costs

2.29

2.32

-1.29%

Total Costs

5.81

5.02

15.74%

The Other Expenses jumped largely to the one time provision of Rs 32.81 lakhs (refer to explanation in operational
highlights above).
The interest costs have been lower largely because of cut in interest rate by SBI due to investment grade rating of
BBB- issued by CARE in July 2014

Profitability Mix (Consolidated)

Q2 (Jul Sep)

Q2 (Jul Sep)

YOY

Particulars (Rs. Cr.)

2014

2013

Change (%)

EBIT

4.47

4.33

3.23%

PAT

1.47

1.36

8.09%

EPS (Rs Per Share)

2.12

1.91

8.09%

Book Value (Rs Per Share)

53.22

46.50

14.47%

The PAT growth has been limited by the one the time provision of Rs 32.80 lakh. The company has forayed into
Madhya Pradesh in this quarter and there have been a jump in salary costs and other branch pre operating expenses,
without any corresponding jump in revenues.

CIN: L55910GJ1992PLC018623

Arman Financial Services Ltd.

501-504 SAKAR III, OPP. OLD HIGH COURT, OFF ASHRAM ROAD, AHMEDABAD, GUJARAT-380014, INDIA
PH. : +91-79-30005000, 27541989 FAX : +91-79-27543666 E-MAIL : finance@armanindia.com Website : www.armanindia.com

Borrowing Mix (Consolidated)

Q2 (Jul Sep)

Q2 (Jul Sep)

YOY

Borrowings (Rs. Cr.)

2014

2013

Change (%)

Long Term Loans

7.55

2.9

160.34%

Short Term Loans

46.84

51.32

-8.73%

Total

54.39

54.22

0.31%

The company has not borrowed incrementally to fund its current growth. Going forward this number will start
moving up as disbursement starts from the recently opened branches

Lending Business Mix (Consolidated)

Q2 (Jul Sep)

Q2 (Jul Sep)

YOY

Lending (Rs. Cr.)

2014

2013

Change (%)

Loans with Maturity of > 1 Year

21.01

21.57

-2.60%

Loans with Maturity of < 1 Year

76.15

60.58

25.70%

Total

97.16

82.15

18.27%

Currently all the microfinance loans have a maturity of less than 1 years.
Loans with the maturity of over 1 years are 2 wheeler loans only. The loans of less than 1 year maturity have a
mix of both microfinance and two wheeler loans.

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.

CIN: L55910GJ1992PLC018623

Arman Financial Services Ltd.

501-504 SAKAR III, OPP. OLD HIGH COURT, OFF ASHRAM ROAD, AHMEDABAD, GUJARAT-380014, INDIA
PH. : +91-79-30005000, 27541989 FAX : +91-79-27543666 E-MAIL : finance@armanindia.com Website : www.armanindia.com

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 forward-looking statements to reflect
subsequent events or circumstances.

CIN: L55910GJ1992PLC018623