The shares of the leading non-banking financial company gained around 8 percent to hit a 52-week high price of Rs 163.20 on Wednesday’s trade after Morgan Stanley gave an overweight call on the stock.
At 10:37 a.m., On Thursday, Manappuram Finance Ltd shares closed at Rs 158.85, down 1.91 percent from the previous close on the National Stock Exchange.
Manappuram Finance Ltd receives 56 percent revenue from gold, followed by microfinance at 26 percent and housing finance at 3 percent. The company has a 56 percent revenue mix from the Gold portfolio and 44 percent from the Non-Gold portfolio.
The company’s strong focus on business development and customer retention led to the number of borrowers increasing from 2.57 million in FY 2021-22 to 3.34 million in FY 2022-23 and an increase in total loan disbursement by 125 percent to 1,92,485.76 million (including Gold Loan).
Total Assets Under Management (AUM) increased by 43% from 70,021.83 million in FY 2021-22 to 1,00,408.93 million in FY 2022-23.AUM per branch increased from 45.92 million in FY 2021-22 to 59.63 million in FY 2022-23.
The company’s revenue has increased by 27 percent year on year, from Rs 1,696 crore in Q2FY23 to Rs 2,156 crore in Q2FY24. During the same year, the company’s net profit jumped by 37 percent, from Rs 409 crore to Rs 560 crore.
Manappuram Finance has delivered a return of 46 percent in the last six months and 41 percent in a year.
Morgan Stanley has given an overweight call with a target price of Rs 200 per share with an upside of 26 percent based on Thursday’s trade price of Rs 158.85.
● Morgan Stanley reiterated guidance for 20 percent company loan growth and 20 percent ROE in FY2024, led by non-gold businesses.
● The Manappuram Finance management has forecasted an 8% increase in gold loans in FY2024, with an emphasis on keeping rates at 21-22 percent.
● According to the brokerage, management is confident in keeping credit charges at 1-1.5 percent for non-gold non-MFI company underwriting quality.
The company has maintained a strong net profit margin over the years, in a recent financial year the company reported a net profit margin of 22.44 percent and an operating margin of 63.26 percent.
Manappuram Finance is a Non-Banking Finance Company (NBFC), which offers a wide range of fund-based and fee-based services including gold loans, money exchange facilities, etc.
Written by Omkar Chitnis
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