Arcil FY23 net profit up 67% on higher recoveries

economictimes.indiatimes.com:

Arcil), the country's oldest bad-loan aggregator, reported a 67% increase in net profit for the fiscal year ended March 2023 on the back of higher recoveries, even as the company increased its loan acquisitions during the year. Net profit in fiscal 2023 rose to ₹239 crore from ₹143 crore the year earlier. Loan acquisitions last fiscal year grew 87% to ₹4,300 crore, while recoveries increased 20% to ₹2,750 crore.

«We have done well both in terms of acquisition as well as recovery of bad loans. It has helped us earn in terms of management fees during acquisition as well as higher upsides from recoveries and incentives so it's a win-win business model,» chief executive Pallav Mohapatra said. Arcil expects to maintain a 60-65% recovery on the acquired assets during the current fiscal year.

Mohapatra said the company's assets under management increased to ₹16,200 crore in the fiscal year ended March 2023 from ₹14,200 crore the previous year. «Retail loans, which include unsecured and mortgage loans, are currently at about 10% of our portfolio which we expect to increase to about 12% to 13% of our portfolio this fiscal,» he said. The CEO projected loan acquisitions to increase to ₹5,200 crore and recoveries to reach ₹3,500 crore this fiscal year.

Arcil expects to acquire at least ₹1,000 crore of retail loans and recover a minimum of ₹500 crore from this portfolio in the current fiscal year. «If we are able to make a recovery of around 60% to 65% of the acquired assets during the year, we would have done well,» Mohapatra said. Despite a slowdown in fresh NPA creation, there are enough legacy accounts which have a chance of revival and can be acquired at an attractive price, he said.