Now Reading: Manappuram Finance shares fall 3.67% despite 41% profit jump
-
01
Manappuram Finance shares fall 3.67% despite 41% profit jump
Manappuram Finance shares closed 3.67% lower at ₹354 on the BSE on August 12, erasing early gains despite reporting a 41% year-on-year rise in Q1 standalone net profit to ₹552 crore. The…
The Story in Brief
Manappuram Finance shares closed 3.67% lower at ₹354 on the BSE on August 12, erasing early gains despite reporting a 41% year-on-year rise in Q1 standalone net profit to ₹552 crore. The board approved raising borrowing limits to ₹1 lakh crore, including through listed non-convertible debentures and commercial papers.
Jefferies retained a buy call with a target of ₹430, saying PAT beat its estimate by 15% and that healthy customer additions should drive 19% consolidated AUM growth in FY27. CLSA kept a hold rating with a ₹350 target, noting that Q1 marked a trend reversal after three quarters of margin pressure. Gold loan book grew 12% quarter-on-quarter, but CLSA sees limited scope for further LTV increase, making future growth dependent on tonnage. Microfinance loan growth resumed but profitability stayed low, while vehicle finance book continued to decline and GNPL remained elevated.
The Indian Opinion
The stock's fall despite a strong profit jump feeds a lazy narrative that markets are irrational. In reality, investors are pricing in specific headwinds: microfinance profitability remains low, vehicle finance book is shrinking, and gold loan yields may have peaked with LTV at 66%. CLSA's caution is more grounded than Jefferies' optimism. The real test will be whether tonnage-driven growth can sustain AUM expansion without margin erosion.
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above.
