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IDBI Capital Report
Manappuram Finance Ltd.'s gold loan portfolio grew by 9% YoY during FY24 in line with the guidance (8-10%). Overall assets under management growth stood at 19% YoY (versus 27% YoY Q3 FY24) due to higher base. Management guided for gold loan growth improvement and overall AUM growth at ~20% in FY25.
We estimate 15% AUM CAGR (FY24-26) backed by non-gold portfolio. MFI asset quality deteriorated with gross non-performing asset at 3.7% versus 2.8% QoQ led by issues in Punjab and Rajasthan portfolio. Thus, provisions increased resulted decline in profitability on QoQ. Consolidated net interest income grew by 3% QoQ led by stable net interest margins; pre-provision operating profit remain flat QoQ led by lower fee income. PAT declined by 2% QoQ led by higher provisions (up 26% QoQ).
We have largely maintained the estimates and maintain ‘Buy' rating with a target price of Rs 225, valuing it at 1.2 times price/adjusted book value FY26E.
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