Manappuram Finance Ltd. share price target

Bain Capital will invest Rs.4,385cr to acquire joint control and promoter status in Manappuram Finance, with all regulatory approvals, including from the RBI, now in place. Post the preferential allotment and open offer, Bain's stake is expected to range between 18% and 41.7%, while the existing promoters' holding will dilute to around 28.9%. The transaction is expected to close by March 31, 2026.The partnership with Bain Capital adds strategic depth, enhancing governance standards, capital flexibility, and execution capabilities as the company enters a stabilization phase. While the recovery is likely to be gradual, operating metrics are expected to improve over time. Accordingly, we upgrade our rating to Hold, with a target...

We find the future prospects promising for Manappuram with a new strategic direction for the business, which entails new management, lower MFI mix, better asset quality management and high growth/low yield in core gold business.

Manappuram Finance Limited reported a stable Q3FY26 performance, reflecting steady execution in its core gold loan franchise and continued consolidation across non-gold portfolios. Consolidated AUM up 13.8% QoQ, driven largely by a sharp recovery in gold loans, while profitability remained moderate amid conservative provisioning and portfolio clean-up. Gold loan AUM rose 23% QoQ, supported by favourable gold prices, faster price transmission and healthy customer demand, reinforcing gold loans as the primary growth driver. Consolidated PAT for the quarter was Rs239 crore, while standalone PAT stood...

MGFL consol. PAT declined 14% YoY to INR2.4b in 3QFY26 (in line). NII declined ~18% YoY to ~INR13b (in line) and PPoP declined ~29% YoY to ~INR6.6b (~5% beat).

MGFL reported consol. PAT of INR2.2b in 2QFY26 (12% beat). NII declined ~16% YoY to ~INR13.8b (in line) and PPoP declined ~35% YoY to ~INR6.7b (in line). Operating expenses grew 6% YoY to ~INR7.4b (in line).

We expect yield compression to persist in the medium term as the company pivots toward secured lending to enhance competitiveness and attract high-value clients. Asset quality in the gold loan segment remains stable, supported by strong gold prices. However, risks in the nongold portfolioparticularly MFI, MSME, and vehicle financeremain elevated. Near-term credit cost pressures are likely to continue, though improved employee incentives may support recoveries and offset provisioning risks. As the company navigates its stabilization phase, improvements are expected to unfold gradually. Given the recent price hike and stretched...

Manappuram Finance's gold loan portfolio grew by 22% YoY (vs 19% YoY FY25) backed by higher gold prices. However, MFI portfolio declined by 51% YoY (down 23% QoQ) due to strategy change. Thus, overall AUM de-grew by 1% YoY vs +2% YoY (FY25). We expect 13% CAGR (FY25-27E) AUM growth led by gold portfolio. MFI losses declined during the quarter due to decline in provisions. MFI asset quality improved with GNPA at 4.4% vs 8.5% QoQ led by lower slippages. Cons. NII declined by 10% YoY led by lower NIMs; PPoP declined by 33% YoY led by lower other income (down 77% YoY). Reported profit vs loss QoQ led by lower...

We revise our rating from BUY to HOLD

We put Manappuram Finance (Manappuram) in this framework to upgrade the stock, from Hold, to BUY. We find future prospect promising with a new strategic direction for the business, which entails new management, lower MFI mix, better asset quality management and high growth and low yield in core gold business.

MGFL reported 1QFY26 consol. profit of INR1.3b. NII declined ~10% YoY to ~INR13.8b (in line) and PPoP fell ~33% YoY to ~INR6.6b (in line).

We expect a short-term yield contraction as the company shifts toward secured lending and aims to attract high-ticket clients. The downward revision in earnings forecasts reflects changes in the equity structure. Although the shift in lending strategy may pressure asset quality in the near term, improved employee incentives could aid recoveries and help offset provisioning risks. With the ongoing restructuring and Bain Capital's involvement, we foresee enhancements in process discipline and cost control. Given the short-term stabilization phase, this may take time. We revise our rating to...

The definitive agreement of Bain Capital for joint control of Manappuram Finance is a positive strategic step for the company towards the next phase of growth with a potential transformation of leadership, operational efficiency and control.

Bain Capital will invest ~INR43.85b in MGFL to acquire ~18% stake on a fully diluted basis through a preferential allotment of equity shares and warrants at INR236/share (~30% above the six-month average trading price and ~9% higher than the CMP).

We revise our rating from HOLD to BUY on reasonable valuations and expectations of improved profitable growth over the medium term.

RBI, in its Press Release dated 8th Jan’25, shared that it has lifted the supervisory restrictions on Asirvad Micro Finance, a subsidiary of Manappuram Finance (MGFL), with immediate effect.

We maintain our HOLD recommendation on the stock.