Neutral Manappuram Finance; target of Rs 280: Motilal Oswal

Motilal Oswal's research report on Manappuram Finance

MGFL reported 1QFY26 consol. profit of INR1.3b. NII declined ~10% YoY to ~INR13.8b (in line) and PPoP fell ~33% YoY to ~INR6.6b (in line). Operating expenses grew 10% YoY to ~INR7.5b (~6% lower than our est.). Consol. credit costs stood at ~INR5.6b (vs. est. ~INR7.5b). Annualized credit costs for the quarter declined ~325bp QoQ to 5.2% (PQ: ~8.4%). Consol. AUM rose ~3% QoQ and declined 1% YoY. Gold AUM grew ~13% QoQ and ~22% YoY to ~INR288b. Gold loan yields declined to ~20.7% (PQ: 22.2%). Net yields on the standalone business declined ~120bp QoQ to 20.5%, while standalone CoB was stable QoQ at 9.2%, resulting in a ~120bp contraction in spreads.

Outlook

Reiterate our Neutral rating on the stock with a TP of INR280 (based on 1.5x Mar’27E consolidated BVPS).