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What is the story about?
Shares of Manappuram Finance
Ltd. are trading lower by 2% on Tuesday, May 5, after the non-banking finance company (NBFC) saw brokerages react to its March quarter results.
Jefferies upgraded the stock to ‘Buy’ and raised its price target to ₹360, implying a potential upside of 17%.
The brokerage pointed to a strong earnings beat, with Q4 PAT at ₹400 crore, up 69% sequentially and ahead of its estimate of ₹290 crore, aided by a ₹130 crore provision write-back following an ECL reset at Asirvad.
Assets under management grew 22% quarter-on-quarter, led by a pickup in gold loan growth, although net interest margins came under pressure due to lower yields.
The brokerage said that FY26 profitability was weighed down by margin compression and elevated provisions, but believes margins have bottomed out and credit costs have peaked.
Jefferies expects profit to grow 2.6x over FY26-28 and return on equity to improve to 13% from 7% in FY26, adding that valuations at 1.6x FY27 estimated book value remain reasonable.
Morgan Stanley maintained an ‘Equalweight’ rating with a price target of ₹270.
Management focussed on accelerating gold loan growth, which rose 31% sequentially, supported by a moderation in yields to align with peers. The brokerage cited limited visibility in non-gold segments, while noting the company’s aspiration to deliver a 15% ROE by FY28.
CLSA retained a ‘Hold’ rating with a target of ₹305, citing a 14% miss in standalone PAT due to weaker net interest income and higher provisions, including a one-time write-off in the vehicle finance segment.
While gold loan growth remained strong at around 30% sequentially, this was driven by lower yields, which declined further during the quarter. Management indicated that yields have now stabilised.
Asset quality improved, with gross and net NPAs declining to 1.8% and 1.6%, respectively.
The company has guided for yields in the 17-18% range and expects ROE to reach 13-16%, with a target of over 15% by FY28.
The stock ended 4.37% higher at ₹307.20 on Monday and has gained over 18% so far this year.
Jefferies upgraded the stock to ‘Buy’ and raised its price target to ₹360, implying a potential upside of 17%.
The brokerage pointed to a strong earnings beat, with Q4 PAT at ₹400 crore, up 69% sequentially and ahead of its estimate of ₹290 crore, aided by a ₹130 crore provision write-back following an ECL reset at Asirvad.
Assets under management grew 22% quarter-on-quarter, led by a pickup in gold loan growth, although net interest margins came under pressure due to lower yields.
The brokerage said that FY26 profitability was weighed down by margin compression and elevated provisions, but believes margins have bottomed out and credit costs have peaked.
Jefferies expects profit to grow 2.6x over FY26-28 and return on equity to improve to 13% from 7% in FY26, adding that valuations at 1.6x FY27 estimated book value remain reasonable.
Morgan Stanley maintained an ‘Equalweight’ rating with a price target of ₹270.
Management focussed on accelerating gold loan growth, which rose 31% sequentially, supported by a moderation in yields to align with peers. The brokerage cited limited visibility in non-gold segments, while noting the company’s aspiration to deliver a 15% ROE by FY28.
CLSA retained a ‘Hold’ rating with a target of ₹305, citing a 14% miss in standalone PAT due to weaker net interest income and higher provisions, including a one-time write-off in the vehicle finance segment.
While gold loan growth remained strong at around 30% sequentially, this was driven by lower yields, which declined further during the quarter. Management indicated that yields have now stabilised.
Asset quality improved, with gross and net NPAs declining to 1.8% and 1.6%, respectively.
The company has guided for yields in the 17-18% range and expects ROE to reach 13-16%, with a target of over 15% by FY28.
The stock ended 4.37% higher at ₹307.20 on Monday and has gained over 18% so far this year.
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