Motilal Oswal Recommends Mid Cap NBFC Stock To Buy, TP Rs 205

Motilal Oswal has recommended investors to buy shares of mid cap NBFC Sector company Manappuram Finance as its non-gold businesses appear promising if executed well. Current market price of Manappuram Finance share on BSE is Rs 168.80 per share with intraday fall of 2.29%. Manappuram Finance shares offered return of 42% year-to-date and soared 46% in last 1-year.

MGFL presented its non-gold businesses have successfully navigated Covid and have reverted to pre-Covid business level. It also exhibited its readiness to deliver healthy AUM growth and profitability in its non-gold businesses, added the analyst.

Manappuram Finance Stock Performance & Return: Last trading price of Manappuram Finance share on BSE is Rs 169.45 per share with intraday fall of 1.91%. Manappuram Finance has a market capitalisation of Rs 14,342.84 crore. Manappuram Finance share's 52-week high price is Rs 177.45 per share and 52-week low price is Rs 101.15 per share, respectively. Manappuram Finance shares offered shareholders return of 21% in last 3-months, gained 35% in last 6-months, jumped 9% in last 2-years, and declined over 2% in last 3-years. In last 5-years, Manappuram Finance stock gave return of 85%.

Manappuram Finance Valuation: According to Motilal Oswal, "The management has stated that it will not pursue loan growth at the cost of a compression in spreads, which we believe will continue to be a driver for higher profitability. MGFL trades at 1.0x Sep'25E P/BV and we believe that there is a scope for a re-rating in valuation multiples for a franchise that can deliver a sustainable RoE of ~20%. Risk-reward for MGFL is favorable and we maintain our BUY rating with a revised TP of INR205 (based on 1.2x Sep'25E consolidated BVPS)."

Manappuram Finance Quarterly Results: The company for the quarter ended September 2023 declared its profit soared 36.91% YoY to Rs 560.65 crore as against Rs 409.49 crore declared in the corresponding quarter of last year. Manappuram Finance also declared an interim dividend of 0.85 paisa per equity share. The NBFC firm fixed November 24 as record date to ascertain the entitlement of interim dividend among the shareholders and said the dividend/dividend warrants would be paid or dispatched on or before December 12.

The company's interest income for the quarter declared at Rs 1404.94 crore as against Rs 1,238.03 crore YoY. Gold loan segment's revenue for the quarter announced at Rs 1,537.22 crore against Rs 1,297.88 crore in the corresponding quarter of last year. The segment revenue for micro finance stood at Rs 636.80 crore against Rs 1,416.33 crore YoY.

Disclaimer:

The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.