Manappuram Finance Ltd. share price target

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 18.6% YoY and 6.1% QoQ aided by strong growth of 30.1% YoY and 11.3% QoQ in Gold AUM. Improvement in Gold AUM was due to increased loan ticket size and high contribution from Online Gold Loan....

Balance sheet liquidity remains comfortable with no funding challenges. We believe the gold business will support overall performance even as non-gold growth remains guarded. We remain positive on the stock and maintain BUY with a target price of Rs 207 (2x FY22E ABV).

Manappuram Finance reported strong sequential growth of 11% in gold loan portfolio (73% of AUM) due to increase in ticket size. Within Non-Gold, Asirvad MFI and vehicle finance segment reported decline of 1%/16% QoQ respectively which resulted in lower AUM growth of 19% YoY vs 25.6% (Q1FY21). NII grew by 17% YoY led by decline in NIMs due to higher liquidity; PPoP grew by 13% YoY led by decline in other income. PAT de-grew by 3% YoY led by higher provisions (up 270% YoY). MFI reported second consecutive quarter of loss of Rs.24mn (Rs.50mn H1FY21). We revised the estimates of gold AUM growth at 15% vs 10% earlier for FY21E. We introduce FY23 estimates in this report. We roll-over to FY23E...

HFC (5.7% in Q2FY21 vs 5.1% in Q1FY21 with old book NPA at elevated levels of 16%) and VEF (NPA at 11% stood higher than 10% previous quarter) business. Said that, collection efficiency at 82%/81%/92% for MFI/VEF/HFC is on recovery mode. With lack of clarity on non-gold asset quality looming large we maintain high order NPAs at 1.9% and credit costs at 1.2% fro consolidated book of FY21. We, therefore, maintain our cautious stance and reiterate Accumulate rating on the stock valuing the consolidated business...

and lowerthanexpected provisions (management's expectation of sustained improvement in collection efficiency in nongold businesses). However, we see the billingcollectiontrends(w/oarrearsandforeclosures)inMFIandCVportfolioasbeing weakerthanpeercompaniesinthesesegments.Thus,weretainourconservativeloan loss outcomes in microfinance (7.5%), vehicle finance (6%) and housing finance (4%) businesses.Notwithstandingthis,weestimateMGFLtodeliver5%RoAinthecurrent yearonthebackofsolidprofitabilityingoldloans.Ascreditcostwouldbemuchlower in nongold segments during FY22, the consol. RoA could climb above 5.5%. RoE...

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...

Manappuram Finance (MFL) reported weak performance in terms of asset quality and growth front, led by its non-gold business. However, operating performance of the Company remained healthy. Gold loan business of the Company continued to remain strong. NII for the quarter grew by 19% YoY to Rs 946 cr, led by 26% YoY growth in consolidated AUM. Healthy NII growth and cost optimization bolstered operating profit growth at 41% YoY to Rs 638 cr. Cost to Income ratio came down by 384 bps QoQ to 32.9%. Profit during the quarter increased by 35% YoY to Rs 368 cr, but it has declined by 8% QoQ, due to 19% QoQ increase in provisions at Rs 145...

Earnings in the gold loans business were strong, driven by healthy valueled AUM growth (4.5% qoq/33% yoy), substantial shift towards online gold loans (63% of book) andsustainedcostreduction.However,45%qoqdeclinein goldholdingsandactivecustomerbasewasdisappointing. Invehiclefinance(5%ofAUM),AUMdeclinedby6%qoq. GrossNPLsspikedfurtherinQ1FY21to10%andsignificant provisionsweremadetocontainNetNPLsat4%.Collection...

COVID uncertainty looming large, provisioning buffers are expected to rise supported by liquidity buffers on BS (Rs60bn). Against this backdrop, we prune down growth and tweak provisioning estimates higher. EPS estimates, therefore, stand trimmed by only 4% for FY21 as operating leverage plays out but FY22-23 estimates stand down by 7-12%. We, therefore, reiterate Accumulate rating, and rollover our target multiple to 2.1x as per Sep'22 PBV...

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 4,622 spread across the country.