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. The total Assets Under Management grew by 30% YoY and 4.7% QoQ driven by Gold loans(+31% YoY, +4.5% QoQ), Microfinance(+43% YoY,...

Manappuram Finance's (MGFL) gold AUM surged 31% YoY to Rs 170bn in Q4FY20.

MGFL reported strong set of fourth quarter results with PAT at Rs 398cr, up 59% YoY and NII at Rs 1025 up 40% YoY.

Manappuram Finance reported strong gold loan (core business) AUM growth of 31% YoY despite loss of 2 weeks in March quarter due to lock down. Within Non-Gold, Asirvad MFI and vehicle finance segment clocked a 43/21% YoY growth respectively, overall AUM growth at 30% YoY (best in the NBFC industry). NII/PAT growth came in strong at 26/43% YoY. PAT was higher than our and market estimates due to robust AUM growth maintained. Strong growth in PAT came on the back of reduction in the corporate tax rate along with higher operating profit growth (up 55% YoY). Asset quality deteriorated with GNPA in gold loan portfolio increased to 1.0% vs 0.5% QoQ. We retain our BUY rating on the stock with a...

Manappuram Finance (MFL) delivered another strong performance (better than estimates) during Q4FY20. NII for the quarter grew by 33% YoY to Rs 1,025 cr, led by strong 30% YoY growth in AUM and 33 bps QoQ expansion in NIM. Strong NII growth and sharp improvement in Cost to Income ratio bolstered operating profit growth at 55% YoY/ 11% QoQ at Rs 657 cr (our estimate: Rs 531 cr). Cost to Income ratio improved by ~200 bps QoQ to 36.7%, largely due to rationalization of security cost. Profit during the quarter increased by 43% YoY to Rs 395 cr vs. our estimates of Rs 352 cr....

Q4FY20 reported sequential earnings dip (Rs3.9bn down 1% QoQ although in-line at Rs4.0bn) led by COVID related Rs 150mn standalone and Rs550mn microfinance provisioning. Buoyed by digital gold (48% of gold AUM as at Q4FY20, 50%+ Apr'20) and 27% YoY non-gold AUM growth, overall AUMs at Rs252bn (in-line) grew healthy 29.8%YoY/4.7%QoQ. Liquidity sufficiency (Standalone cash/undrawn bank lines of Rs23bn, Rs30bn Asirvad) and cost rationalization (opex growth mere 2% QoQ, C/I down to 36% from 48% a year...

Portfolio accretion in the mainstay Gold Loans (67% of consol. AUM) remained strong (grew 4.5% qoq/31% yoy), and was largely driven by higher gold prices (gold holdings declined 1.5% qoq and...

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...

Gold financing business moat with strong AUM and earnings growth, supported by stable funding profile and benign asset quality

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. In the current scenario, we expect gold prices to moderate in the medium to long term and hence do not expect further upside considering high valuation of the stock and hence, we value the...