Manappuram General Finance - Beats expectations; regulatory risk remains - Emkay

Reco: REDUCE
CMP: Rs 35
Target Price: Rs 30

- MAGFIL Q1FY13 results came in above expectation with NII at Rs4.2bn and Net Profit at Rs1.6bn. Beat on estimates driven by margins

- +vely surprised by stable NIM's at 12.4% even as the AUMs in high LTV category declined to 10% vs 25% of total. Penal interest on NPAs may also have played role.

- The risks highlighted by us becoming more prominent viz. (i) slowing productivity (ii) growth being price led (iii) risks to margins and (iv) rising NPAs.

- Impending regulatory risks with Reco of KUB Rao committee expected anytime soon. Despite raising estimates, assign REDUCE rating with TP of Rs30.

Source : Equity Bulls

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