Manappuram Finance - Worst is priced in - Espirito Santo Securities

Manappuram is a story which went badly wrong, from a high growth sector with >25% ROE and enterprising management, to a declining loan book, falling ROE, a more hostile regulatory environment and concerns raised around governance. But with the stock trading at a discount to book and our expectation of the loan book growing from hereon, we think the stock merits another look.

Our industry sources suggest regulatory clarity will be received this calendar year, after which we expect the stock to start to re-rate.

We upgrade our stand to BUY and increase our fair value from Rs39 to Rs45, 25% upside.

Source : Equity Bulls

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