Manappuram Finance Ltd. share price target

We retain BUY on Manappuram Finance (MGFL) with SOTP based target price (TP) of Rs255. Superior risk management and credit underwriting have enabled MGFL avert severe shocks, as also seen in the FY21 results. This should also help overcome nearterm challenges posed by the second wave of COVID (in addition to the healthy provisioning buffer and respectable CE trends) and emerge stronger as normalcy is restored. MGFL offers a blend of a diversified balance sheet, healthy revenue/earnings growth, and superior return ratios. At 1.2x FY23E ABV, it remains grossly under-valued...

We remain positive on the stock and maintain BUY with a target price of Rs 190 (1.4x FY23E ABV), implying an upside of 19% from CMP.

Manappuram Finance's gold portfolio de-grew by 6% QoQ due to higher auctions (Rs.4bn) as well as decline in gold prices (down 12% QoQ). This resulted into slowdown in AUM growth to 8% YoY vs 15% YoY (Q3FY21). However, non-gold portfolio grew by 10% QoQ led by 12% QoQ growth in MFI (22% share of AUM). MFI reported stable asset quality as GNPA stood at 2.5% vs 2.6% QoQ; however PAT declined by 82% QoQ due to higher provisions (up 96% QoQ). We need to watch out for second wave impact on MFI portfolio. NII grew by 18% YoY led by improvement in NIMs; PPoP grew by 11% YoY led by decline in other income (down 62% YoY). PAT grew by 24% YoY led by lower provisions (down 13% YoY). We believe covid-19...

Compared to our expectation of 3% QoQ decline, the gold loan book declined 6% QoQ. All the other segments delivered sequential loan book growth the most prominent being the MFI segment with 11% growth....

growth stood in-line with guidance, auctions surge (Rs4040Mn vs Rs80mn: 9MFY21) and tonnage decline (-4.3%QoQ) stood stark for Q4FY21. Short tenure loan policy (3-month) implied upfront loss recognition on account of gold price correction that reflected in tonnage shrinkage. However, gold loan borrowers comprising of small business entrepreneurs have been facing the brunt of the second wave. MFI NPAs stood steady QoQ at 2.5%, however, AprMay'21 weak collections (7-8% dip from 101%: Mar'21) led by second wave...

INDIA l Institutional Research l BFSI l 05 April 2021 Manappuram Finance l BUY l TP: 255 The Gold' that is set to glitter We initiate coverage on Manappuram Finance (MGFL) with a BUY and target price (TP) of Rs255. We believe, despite this thinly covered stock sporting an appealing combination of diversified product offerings, strong revenue/earnings growth, and respectable return ratios, it is grossly undervalued. Our concerted deep dive analysis reveals a business well-architected to combat external shocks, even as MGFL operates...

Manappuram Finance (MGFL) is one of the leading gold loan NBFCs in India and is well diversified into other business segments like housing loan, vehicle loan and microfinance, with a branch network size of around 4,623 spread across the country Total AUM grew by 14.7% YoY and 27% QoQ aided by strong growth of 24.4% YoY and 2.4% QoQ in Gold AUM. Company has started door-step gold loan facility across branches in order to further strength its business...

we believe specialists like MGFL will continue to benefit. We remain positive on the stock and maintain BUY with a target price of Rs 207 (1.5x FY23E ABV).

Manappuram Finance's non-gold portfolio grew 4% QoQ post de-growth in last 2 quarters as in the previous quarter it was impacted from Covid induced lockdown. Growth was led by 4% YoY growth in disbursements to Rs.15.19bn during Q3FY21. However, gold loan growth slowed down to 2.4% QoQ (11% QoQ Q2FY21) due to stable ticket size and decline in tonnage. MFI (19% of AUM) reported PAT of Rs.712mn post 2 consecutive quarters of loss (Rs.50mn H1FY21) due to lower provisions (down 26% QoQ) and AUM growth (8% QoQ) which is the key positive. NII grew by 16% YoY led by stable NIMs; PPoP grew by 21% YoY led by decline in operating expenses (down 5% YoY). PAT grew by 13% YoY led by higher provisions....

Manappuram Finance (MGFL) is amongst the leading gold loan NBFCs in India and is well diversified into other business segments like housing loan, vehicle loan and microfinance, with a branch network size of around 4,623 spread across the country.