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Last Updated : Aug 03, 2020 04:10 PM IST | Source: Moneycontrol.com

Accumulate Manappuram Finance; target of Rs 184: Arihant Capital

Arihant Capital recommended accumulate rating on Manappuram Finance with a target price of Rs 184 in its research report dated July 31, 2020.

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Arihant Capital 's research report on Manappuram Finance


Manappuram Finance (MFL) reported weak performance in terms of asset quality and growth front, led by its non-gold business. However, operating performance of the Company remained healthy. Gold loan business of the Company continued to remain strong. NII for the quarter grew by 19% YoY to Rs 946 cr, led by 26% YoY growth in consolidated AUM. Healthy NII growth and cost optimization bolstered operating profit growth at 41% YoY to Rs 638 cr. Cost to Income ratio came down by 384 bps QoQ to 32.9%. Profit during the quarter increased by 35% YoY to Rs 368 cr, but it has declined by 8% QoQ, due to 19% QoQ increase in provisions at Rs 145 cr. GNPA ratio increased to 1.3% from 0.9% in Q4FY20.


Outlook


We value the stock at 1.8x P/ABV to its FY22E ABV of Rs 102 and arrive at a fair value of Rs 184 per share. We downgrade our rating to Accumulate from Buy.


For all recommendations report, click here


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First Published on Aug 3, 2020 02:40 pm
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