Geojit: Manappuram Finance Ltd - Company update - Buy (08th April 2020)

Valuations moderated, high upside potential

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.

Owing to Covid-19 pandemic, we expect MGFL's interest income to only fall by 0.6% in FY22E compared to our previous estimate.

Going forward, we expect NIM to remain stable at 15.9% in FY22E as we expect fast recovery in business growth.

Considering the current slowdown, we have also revised our estimate for PAT to Rs 1,946cr in FY22E which is largely in line with our previous estimate of Rs 1958cr.

We value the stock at 1.3x FY22E Adj. BVPS of Rs 102.4 and recommend BUY rating with a target price of Rs 133.

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Shares of MANAPPURAM FINANCE LTD. was last trading in BSE at Rs.101.35 as compared to the previous close of Rs. 92.45. The total number of shares traded during the day was 528997 in over 5013 trades.

The stock hit an intraday high of Rs. 103.8 and intraday low of 94.25. The net turnover during the day was Rs. 52332617.

Source : Equity Bulls

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