Following strong Q4 earnings, Manappuram Finance Limited shares increased by 3% in early trading. Manappuram Finance shares were 2.23 percent higher at Rs. 112.45 on the NSE at 9:40 a.m.
On May 12, 2023, Manappuram Finance announced a 58% increase in its consolidated net profit for the quarter ended in March compared to the same period a year earlier, coming in at Rs 413 crore. The Board of Directors of the business has declared an interim dividend of Rs 0.75 per equity share with a face value of Rs 2.
The Kerala-based NBFC’s overall income was Rs 1,771 crore, up 19% from Rs 1,481 crore in the same period last year. Three-fourths of the company’s profit, or pre-tax profit, comes from the gold loan industry, which saw a 16% growth to Rs 422 crore. In the meantime, its micro-finance sector reported a pre-tax profit of Rs 144 crore compared to a deficit in the prior year.
However, Manappuram’s gold loan assets within management decreased 2% year over year as borrowers needed less security to borrow money due to increased gold prices. By comparison, its client portfolio for gold loans went up 0.4%.
Manappuram Finance got a buy rating from CLSA with a target price of Rs 140 per share. The share price will be driven by a weak Q4FY23 with profit after tax missing forecasts by 5%. A net interest margin (NII) of 8% was the only factor contributing to the shortfall. After 2 quarters of a dip in gold loans, Manappuram produced a 6% sequential increase, which the management ascribed to a decrease in gold loan yields caused by loan duration extensions. The management said that a stay order had been imposed by the high court on the most recent ED probe.
Manappuram Finance has a target price of Rs 143 per share set by BofA. According to the company, earnings improved non-gold profitability and growth, meeting forecasts and supported by a solid FY24. The business claims that the high court on Friday granted a stay of the ED’s executive order and that it would be overturned in upcoming sessions.
Manappuram Finance has been rated as overweight by Morgan Stanley, with a target price of Rs 160 per share. Positively unexpected was the company’s loan increase. Due to the switch to long-term loans, the rates on gold loans were lower; however, management expects this to progressively improve. According to the brokerage company, Asirvad’s performance and asset quality were both excellent.
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