Manappuram Finance - AUM Growth Momentum To Remain Robust; Maintain Buy: Axis Securities

Axis Securities Report

Gold loan assets under management grew by 11% in the last five years. With AUM growth expected to maintain its healthy momentum and gold loan yields to remain between 21-22%, growth in net interest income is expected to remain healthy.

Manappuram Finance Ltd. remains confident to clock in AUM growth of 20% and return on equity of 20% for FY24.

Furthermore, one of the key competitive advantages Manappuram has over banks is its shorter turn-around time. Asset quality is expected to remain stable.

With growth prospects remaining strong and key levers being intact, we have baked in the AUM growth rate at ~20% over FY23-26E.

Manappuram is currently trading at 1.0 times Sep-25E adjusted book value. However, we believe, the stock is trading at attractive valuations, given the growth prospects it possesses.

Thus, we maintain our 'Buy' rating on the stock with the revised target price of Rs 205/share (1.2 times Sep-25E ABV), implying an upside of 25% from the current market price.

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