Shares of Manappuram Finance Ltd rose sharply in Wednesday’s trade, extending their gains for the third straight session. The stock surged 10 per cent to hit a day high of Rs 154.65. At this price, the scrip was just 1.21 per cent away from its one-year high of Rs 156.55, a level seen on September 4 this year. The counter has gained 52.89 per cent from its 52-week low of Rs 101.15, hit on February 27, 2023.
The Kerala-based non-banking financial company (NBFC) said its profit for the quarter rose 36.91 per cent year-on-year (YoY) to Rs 560.65 crore compared with Rs 409.49 crore in the same quarter last year. The company also declared an interim dividend of 0.85 paisa per equity share.
The gold loan company has fixed November 24 as record date to ascertain the entitlement of interim dividend among the shareholders and said the dividend warrants would be paid or dispatched on or before December 12.
Manappuram Finance’s interest income for the quarter came in at Rs 1,404.94 crore compared with Rs 1,238.03 crore YoY. Gold loan segment’s revenue for the quarter stood at Rs 1,537.22 crore against Rs 1,297.88 crore in the same quarter last year. The segment revenue for micro finance stood at Rs 636.80 crore against Rs 1,416.33 crore YoY.
Brokerage Motilal Oswal has given a ‘Buy’ call on the counter with a target price of Rs 180, suggesting a potential upside of 16.39 per cent. “We raise our FY24E/FY25E EPS by 5 per cent/6 per cent to factor in stronger growth in the non-gold segments and higher other income. We estimate a 10 per cent/20 per cent AUM CAGR in gold/consolidated book over FY23-26. We model a consolidated PAT CAGR of 27 per cent over the same period to arrive at consolidated RoA/RoE of 5 per cent/20 per cent in FY26. Reiterate BUY with a TP of Rs 180 (based on 1.0x Sep’25E consolidated BVPS),” it stated.
The management has stated that it will not pursue loan growth at the cost of a compression in spreads, which we believe will continue to be a driver for higher profitability, the brokerage added.
On technical setup, the counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The counter’s 14-day relative strength index (RSI) came at 66.67. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 8.77 against a price-to-book (P/B) value of 1.33.
The scrip has an analyst target price of Rs 169, Trendlyne data showed, suggesting a potential upside of 11 per cent in a year. It has a one-year beta of 0.33, indicating low volatility on the counter.
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