Manappuram Finance - Non-Gold Businesses On Strong Growth Trajectory: Motilal Oswal

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.We attended Manappuram Finance Ltd.’s analyst meet hosted by its senior management team. Key takeaways from the meet:The management said that it is making rapid progress in transforming Manappuram Finance into a diversified non-banking financial company, with gold loans contributing over 50% of consolidated assets under management. It has guided for a 20% compound annual growth rate in consolidated AUM and a consolidated return on equity of 20% in the medium term. The company expects to return to gold AUM growth from Q4 FY23. We estimate Manappuram Finance’s gold AUM to grow by ~3.5% QoQ in Q4 FY23, driven by improving demand from small-ticket size borrowers. Manappuram Finance’s subsidiary, Asirvad MicroFinance, has witnessed a strong traction in loan disbursements. AUM of its MFI business has crossed ~Rs 100 billion, implying strong ~25% QoQ growth. For micro financiers, regulatory tailwinds include: 1. the spread deregulation allowing for risk-based pricing (in the range of 24%), and 2. the recent Supreme Court order in Andhra Pradesh quashing the jurisdiction of state governments to govern the Reserve Bank of India-regulated MFIs. Other non-gold segments, such as micro, small and medium enterprise/personal loans, commercial vehicle loans and housing finance businesses, have witnessed strong growth on a low base. We expect the non-gold businesses (including MFI) to contribute ~45% to the AUM mix by March 2023 and ~50% by Mar-24..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Manappuram Finance - Non-Gold Businesses On Strong Growth Trajectory: Motilal Oswal

Strong growth in MFI business; looking to raise equity capital in FY24.

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