Motilal Oswal's research report on Manappuram Finance
At its analyst/investor meet, MGFL’s senior management team showcased the company’s capabilities in its non-gold business including MFI, vehicle finance, home finance and MSME & allied products. Beyond its view/outlook on the gold business, MGFL presented a drill-down on each of its non-gold businesses, including 1) a peek into its sourcing, underwriting and collection processes, 2) how these businesses have successfully navigated Covid and have reverted to pre-Covid business indicators, and 3) readiness to now exhibit healthy AUM growth and profitability in non-gold businesses.
Outlook
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).
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