Manappuram Finance Q4 Results Review: IDBI Capital Downgrades The Stock To 'Hold', Cuts Target Price

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IDBI Capital Report

Manappuram Finance Ltd.’s gold loan portfolio grew by 19% YoY (vs 18% YoY Q3 FY25) backed by higher gold prices. However, MFI portfolio declined by 35% YoY (down 21% QoQ) due to RBI ban on Asirvad MFI. Thus, overall AUM growth stood at 2% YoY vs 10% YoY (Q3 FY25). We expect 14% CAGR (FY25-27E) AUM growth led by gold portfolio. MFI losses increased during the quarter due to increase in provisions.

MFI asset quality deteriorated further with GNPA at 8.5% vs 5.8% QoQ led by higher slippages. Consolidated net interest income declined by 3% YoY led by lower net interest margins; pre-provision operating profit declined by 27% YoY led by lower other income (down 73% YoY). Reported loss was Rs 2.03 billion led by higher provisions (up 3.9x YoY).

We have revised estimates downwards by 19%/14% for FY26E/27E respectively. We downgrade to ‘Hold’ rating with a target price of Rs 240 (earlier Rs 252), valuing it at 1.2x price/book value FY27E.

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