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Last Updated : May 16, 2020 03:39 PM IST | Source: Moneycontrol.com

Buy Manappuram Finance; target of Rs 165: YES Securities

YES Securities is bullish on Manappuram Finance has recommended buy rating on the stock with a target price of Rs 165 in its research report dated May 14, 2020.

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YES Securities' research report on Manappuram Finance


On expected lines, Manappuram delivered strong results for Q4 FY20 with buoyancy in gold prices. AUM grew 5% qoq/30% yoy, while PPOP grew much faster at 11% qoq/55% yoy aided by operating leverage. Portfolio accretion in the mainstay Gold Loans (67% of consol. AUM) remained strong (grew 4.5% qoq/31% yoy), and was largely driven by higher gold prices (gold holdings declined 1.5% qoq and grew by modest 7% yoy). Growth in customer base remains anemic. Weighted average LTV of GL portfolio stood at <60%, based on past 30-day avg. price. Share of online portfolio increased to 48% due to restricted movement/lockdown in March. It has further increased to 61% currently. Very few GL customers opted for moratorium and uncollected interest levels remain largely unchanged (~1.5 months) with collection through online channel.


Outlook


Retain BUY rating with a 12m TP of Rs165. Robust profitability in GL business (RoA of 6.5%+) to mitigate Covid impact on other loan segments. Overall RoA/RoE delivery to be resilient in FY21/22.


For all recommendations report, click here


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First Published on May 16, 2020 03:39 pm
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