financial analysis of mangal credit

1. Summer Internship Project
On
financial analysis
Of
mangal credit & fincorp limited.
Company Mentor
Faculty Mentor
Dr. G. Rameshkumar

2. Industry Analysis
Company Analysis
Research Methodology
Analysis and Interpretations
Findings and Conclusions
Learning from SIP
Flow of Presenatation

3. Industry Analysis
India is one of the largest gold markets with an annual
demand of around 700 tonnes as of 2018; Gold stock in
India is estimated at around 15,000 tonnes which
translates into 10% of the total global gold stock.
The gold loan market in India has valued at ~INR 2,950.42
Bn in 2020 and is expected to reach ~INR 6,295.40 Bn by
2025, expanding at a compound annual growth rate
(CAGR) of ~12.75% during the
2020-2025 period
Rural
65%
Urban
35%
unorganized
60%
organized
40%

4. Industry Outlook
2015 2016 2017 2018 2019 2020 2021 2022
5,000
4,000
3,000
2,000
1,000
0
MUTH
32.6%
INDIAN BANK
28.4%
MUTHF
13.2%
IOB
12.9%
MGFL
12.9%

5. Some gold loan players and their interest rates
15%
10%
5%
0%

6. Company Overview
Financial Analysis
Company Analysis

7. MCFL was established in the year 2012, where it acquired a 50-year-old company TAK Machineries & Leasing Ltd.
MCFL is currently based in Mumbai and operates in whole Maharashtra state.
It is engaged in the business of providing loan and credit facilities in both Secured & Unsecured finance: Gold
loan and Diamond loan ( Entered in September, 2020)
MSME Business loan Personal
loan and Home loan Other
Credit facilities
Mission of the company is to dominate the industry by satisfying stakeholders, overseeing wealth maximization, good governance, and employee satisfaction. It aims to ensure eco-
socio benefits and their positive impact by contributing towards nation building.
Vision of the Company:
Company Overview
It aim at becoming the
most preferred service
provider in the financial
space.
It aim to enter the
Lending segment by
harnessing our existent
capabilities and succeed
amid humongous
competition.
It aim to expand
geographically to
penetrate into multiple
cities across various
states beyond
Maharashtra.
It aim at achieving faster
goals growing to
become 5 times our
current size and touch
our 500 crore target by
2025.

8. BALANCE SHEET
A s o f January 1, 2025
CURRENT ASSETS
48.6%
LOAN AND ADVANCED
35.1%
CURRENT INVESTMENTS
8.2%
NON CURRENTASSETS
7.4%
Assets Liabilities Equity
C. Liabilities
76.4%
Long term Liabilities
23.6%
Total s.fund
50%
Reserve
39.8%
Equity
10.2%

9. Income Statement Assumptions
A s o f January 1, 2025
Revenue Expense
6.50
7.00
7.50
8.00
8.50
9.00
operating revenue other income
2020
2020
0
0.2
0.4
0.6
0.8
1
1.2
employee benefits
exp.
finance cost D&A Exp other Exp.
2020
2020
assumptions
Revenue 25%
Employee benefits exp. – 11%
Other exp- 25%
D&A – 6%
Other income 156%

10. FCF = EBIT*(1-Tax Rate) + Depreciation & Amortization - Net Capex - Increase in Working Capital
2020 2019 2018 2017 2016 AVERAGE 2021 2022 2023 2024 2025
Revenue 16.32 10.61 9.83 8.63 9.19 . 20.2368 25.09363 31.1161 38.58397 47.84412
Revenue growth 53.82% 7.93% 13.90% -6.09% 24.00%
Total operating exp 2.76 2.65 3.57 4.53 7.84 2.173287 1.711296 1.347514 1.061064 0.835506
Expenses Growth 4.15% -25.77% -21.19% -42.22% -21.26%
EBIT 13.56 7.96 6.26 4.1 1.35 18.06351 23.38234 29.76859 37.5229 47.00862
Tax Rate 23% 25% 27% 34% 19% 25% 25% 25% 25% 25% 25%
depreciation+ 0.14 0.16 0.12 0.1 0.1 0.124 0.124 0.124 0.124 0.124 0.124
net capital exp - -11.1 0.3 2 1 1 -1.36 -1.36 -1.36 -1.36 -1.36 -1.36
change in WC - -14.3 -10 -12.15 -12.15 -12.15 -12.15 -12.15 -12.15
FCF 24.39365 28.36275 33.12841 38.91496 45.99354
EV/EBITDA multiple 11
Terminal value
EV/EBITDA 527.6493

11. Research Methodology
Research Objectives Research Design
Sources of Data Data Analysis
To evaluate the gold loan Industry To
identify the growth performance
To get fair idea about company’s performance in future
Valuation of Company’s Financial Instruments Determine
how much to pay for an acquisition.
Descriptive Research Design for Industry Analysis
Exploratory Research Design for Financial Model
Secondary Data – Research Papers and Articles
Secondary Data (Financial Statements of Company)
Analysis Tool – Discounted Cash Flow Method.
SWOT, PEST and 5 forces models for analysis of industry.
Analysis of company’s financial statements.
Discounted Cash Flow method for forecasting.

12. Findings and Conclusions
•Increasing Gold Loan volume in India indicates that Pandemic did not affect gold
loan industry. With gold being a prominent feature in India's investment
landscape, the demand for gold loan has grown due to the impact of the COVID-
19 pandemic and is expected to grow to Rs.461700 crore by 2022.
•Gold Loan has become a part of the popular business in India. The volume of gold loan
in India is continuously increasing.
•Gold demand in India has decreased from 690 tons in 2020 to 446 tons in 2020 .
•Gold Loan has easy process with little documentation that attracts more no. of
customer.
•There is strong positive correlation between gold prices and gold loan volume in India.

13. Suggestions and Recommendations
•The untapped markets in West and North India (which together hold almost 45%
of gold in India, but have minimal credit penetration) reflects there is more scope
for gold loans in the future.
•WGC estimates that about 65 per cent of the Indian household gold belongs to
rural communities, who are the biggest purchasers of gold loan. Companies can
target those customer segment that may help in growth of business.
•Since high LTV ratio can affect the gold loan business so companies have to
keep an open eye on RBI guidelines.
•Since there are large no. of players in this business with similar products and the
customers do not have a switching cost. It is recommended that they may focus
on innovation. Innovative lending scheme can attract large no of customer and
this may help in growth of the business.
•The financial forecasting model provides an estimated value based on the
quantitative aspects of the financial statements.

14. Learnings
•Gained insight into the gold loan industry.
•Researching data for Business.
•Learned to work in a virtual environment.
•Tested theoretical concepts into practice.