Shares of Manappuram Finance fell 3 percent to Rs 251 apiece on August 11 after the company reported weak June quarter (Q1FY26) results. Brokerages stayed in a wait-and-watch mode, with management indicating that the worst phase is over and profitability is expected to return by the fourth quarter of FY26.
Jefferies maintained a “hold” call but raised its target price to Rs 275 per share. It said Q1 profit after tax was in line with estimates as weaker net interest income (NII) was offset by lower provisions in the microfinance (MFI) segment.
Gold loans grew 12 percent quarter-on-quarter, mainly due to higher prices. However, customer growth was muted despite yield cuts.
Catch all the market action on our LIVE blog
The brokerage noted that lower NIMs, unwinding of non-gold loans, and elevated MFI provisions will weigh on earnings. While valuations appear reasonable, Jefferies said more clarity on the turnaround under the new CEO is crucial for a re-rating.
CLSA retained its “outperform” rating with a target price of Rs 260 per share. It said Q1FY26 pre-provision operating profit (PPoP) and net profit missed estimates by 9 percent due to sharper-than-expected declines in yields and spreads. Management has trimmed lending rates across high-ticket loans and plans further cuts to around 18 percent over the next four to six quarters.
Loan growth of 13 percent quarter-on-quarter was driven entirely by higher ticket sizes, while the Asirvad MFI business saw a 23 percent sequential decline in its loan book. CLSA echoed management’s view that the worst is behind and profitability should return by Q4FY26.
In Q1FY26, Manappuram Finance’s net profit fell 75 percent year-on-year to Rs 138 crore from Rs 555 crore in the same quarter last year. Revenue from operations declined 9 percent to Rs 2,262 crore.
The gold loan segment saw a 10 percent year-on-year rise in revenue to Rs 1,904 crore, but the microfinance segment posted a steep 53 percent drop to Rs 361 crore.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
